Research On Motivation And Performance Of Cross-industry M & A Of Fuchun Technology

As companies want to transform,there have been more and more corporate mergers and acquisitions in recent years.Among them,cross-industry mergers and acquisitions aimed at diversified operations or business transformation have become the choice of more and more enterprises.In 2016,M & A events aimed at diversification strategies or business transformation accounted for 18.2% of the overall M & A scale.In recent years,the game industry has developed rapidly,and game companies have become popular targets for mergers and acquisitions because of their light assets and high profitability.The scale of M & A in the game industry has increased year by year,and the amount of M & A has also been increasing.This paper analyzes and summarizes the theories of cross-industry M & A,taking Fuchun’s cross-industry M & A cases as the research object,analyzes the motivations of M & A,and adopts three methods to evaluate the performance of Fuchun’s cross-industry M & A.Fuchun’s cross-industry merger and acquisition motives include diversified operations,improved operating performance,synergy effects,and managers’ overconfidence.This article finds that cross-industry mergers and acquisitions of enterprises have not achieved the expected results,and basically have no motivation to achieve mergers and acquisitions.In terms of strategic transformation,Fuchun has achieved diversified operations.In terms of performance improvement,cross-industry mergers and acquisitions have not long-term improved corporate performance.In terms of achieving synergy,Fuchun’s cross-industry mergers and acquisitions have not achieved a good synergy.In terms of the cultivation of core competitiveness,Fuchun shares focus on R & D and innovation,but the brand effect of the game business continues to weaken,and the subsequent development momentum is insufficient.In the long run,Fuchun’s cross-industry M & A performance has been poor.In the process of cross-industry M & A of Fuchun Technology,there are problems of excessively high M&A premiums,poor quality of underlying assets,and improper payment methods.In the follow-up operation process,the company has problems of poor M & A integration and the reduction of major shareholders’ cash.The downturn in the gaming industry has also led to poor M & A performance.In view of the problems of Fuchun Technology,this article believes that enterprises should improve from three aspects: strengthening the subsequent integration of M & A,improving the profitability of the M & A target,and improving the operating efficiency of the communication business.Summarizing the experience in the analysis process,this article puts forward relevant suggestions for cross-industry M & A.Before M & A,the enterprise should clarify the motivation of the M & A,reasonably select the target industry and the target company,and formulate a long-term business strategy.Enterprises in M & A should pay attention to the valuation of the target company and adopt appropriate payment methods.After M & A,companies should focus on integration.This article analyzes the key factors of cross-industry M & A to achieve diversified operations through in-depth research on the case of Fuchun Technology,and provides experience and reference for other companies that wish to conduct diversified operations through cross-industry M & A.