Analysis Of Midea’s M&A KUKA’s Financial Statements Based On Harvard Framework

As a direct access to obtain high-quality resources,M&A activities are highly concerned by domestic and foreign enterprises.Midea Group,a leading enterprise in China’s home appliance industry,acquired Kuka Robotics of Germany at the end of 2016 at a high premium of nearly 40%.But since the merger,Kuka Robotics’ performance has plummeted and the company’s valuation has plummeted.Therefore,how to evaluate the effect of the merger has become a topic of academic controversy.This article selects the acquisition case of Kuka Midea as the research object,and analyzes the public financial statements of Midea from 2015 to 2019 using Harvard framework,hoping to objectively evaluate the effect of this acquisition from the perspective of financial analysis combined with non-financial perspective.Firstly,the literature and theory about M&A and performance evaluation are sorted out to lay the research foundation of this paper.Secondly,it introduces the general situation of M&A and analyzes the rationality of the selection of M&A object.Based on the Harvard framework,this paper makes a comparative analysis of the operation of Midea before and after the acquisition of the library card from the perspective of accounting and the decomposition of financial information from the perspective of corporate strategy,and explores the impact of the acquisition activities.Finally,based on the above analysis,Midea’s merger and acquisition activities and integration activities are evaluated respectively,and combined with the industry prospect,targeted countermeasures are put forward for the future operation of Midea.The conclusions are as follows: First,it is reasonable for Midea to acquire the library card from its own strategy.Second,the current integration of Midea has played a certain role in reducing labor costs,improving inventory turnover,improving profitability and other aspects.Third,the excessively high purchase consideration leads to the risk of a goodwill crash of Midea,and reduces the solvency of Midea.Fourth,in the short term,the excessive independence of Kuka makes it difficult for Midea to effectively control it.We should not blame the failure of integration of Midea for the poor management of Kuka.In view of the above problems,this paper puts forward some suggestions on strengthening accounts receivable management,avoiding short-sighted behavior,using cost advantages to layout multiple industries,and increasing R&D investment.