Research On The Motivation And Performance Of Wanda Film’s Mergers And Acquisitions

With the rapid development of China’s economy,the film industry,as a national key development industry,has developed from the pursuit of "quantity" with high box office to the pursuit of "quality" with content as the king.Many large enterprises and groups have emerged in the industry,and the business has expanded from a single link of the industry to cover the whole film industry chain.The capital operation of merger and acquisition plays an important role in it.Because M & A can break the barriers of industry entry and achieve rapid expansion,capital has poured into the film industry through M & A.The upsurge of M & A enthusiasm is cooling down with the continuous emergence of goodwill thunder in the film industry,and the trend of industry integration is inevitable.Therefore,whether M & A can promote the development of film industry enterprises,how to improve the success rate of M & A,and how to reduce the risk of M & A are worth pondering.As the leading company in the industry,the study of W Company’s M & A cases is representative to some extent.Therefore,this paper takes W company as the research object in the continuous M & A events from 2015 to 2019 to explore the impact of M & A on it,so as to provide some reference for the M & A tide in the film industry in the near future.Firstly,it gives a brief introduction to W company,sorts out the M & A events of W company in the past five years,and focuses on the four major M & A events of W company.Then,according to the motivation theory of M & A,it concludes that the motivation behind W company’s continuous M & A is mainly driven by external national policies,trend of industry M & A,industry competition environment,internal internationalization strategy,diversified development strategy,and integration strategy,seizing the overseas market,enhancing market power,looking for new profit growth points and the layout of the whole industry chain.It also demonstrates the M & A performance of W company under continuous M & A from various angles.Under the event study method,we can see that the short-term performance of M & A in the first two years is positive,while the short-term performance of Wanda film and television in the later period is not good;under the financial indicator method,through the vertical comparison with itself and the horizontal comparison with CTV media without M & A activities,we can see that under the continuous M &A,the profit scale,profitability and growth ability of W company have been improved,but the solvency and operation ability are reduced,accompanied by high goodwill risk.The method of economic value-added(EVA)shows that W company’s corporate value is constantly improving under the continuous M & A behavior from 2015 to 2018,while the M & A behavior in 2019 weakens the company’s corporate value.Finally,through M & A of W company,this paper puts forward four suggestions for W company.The first is to actively respond to market changes and expand the sources of income;the second is to increase the cost control,eliminate the poor profitability of the cinema,and improve the overall profitability;the third is to strengthen the synergy effect;the fourth is to pay attention to financial risks.At the same time,this paper puts forward three references to the M & A of enterprises in the same industry: first,reasonably estimate the effect of M & A to avoid high goodwill acquisition;second,select the appropriate time of M & A;third,clarify the strategic objectives.