Motivation And Performance Research Of Traditional Enterprises’ Diversified M&A

In recent years,China has entered a new economic situation characterized by structural adjustment,complex international situation and transformation of growth drivers.The severe and complex external development environment,coupled with the development bottlenecks and shortcomings of traditional enterprises,increasingly becoming the limit of traditional enterprises’ development.Traditional enterprises need to transform their business to remove the impediment.Along with the maturity of China’s capital market,mergers and acquisitions activities have ballooned,and traditional enterprises have increasingly preferred to achieve transformation and upgrading through diversified mergers and acquisitions.Among them,there are many traditional industry leaders,relying on their own advantages on capital and management experience accumulated over the years,deploy new industries and break through development bottlenecks through diversified mergers and acquisitions.Therefore,this thesis selects the typical case of Fujian Green Pine’s merger with Nox Bellcow Cosmetics,to study how the leaders of traditional industry segments achieve transformation and upgrading and break through development bottlenecks through diversified mergers and acquisitions.Through the analysis of the M&A motivation and performance,this thesis sums up the enlightenment and lessons,and provides guidance for the traditional industry leaders who hope to realize transformation through diversified M&A in the future.In the process of analyzing the case of Fujian Green Pine’s merger with Nox Bellcow Cosmetics,this thesis firstly sorted out the entire merger and acquisition process,the merger and acquisition payment method,high-premium merger,performance commitment and equity changes.Then,in order to evaluate the realization degree of M&A performance to M&A motivation,this thesis analyzes the motivation of Fujian Green Pine to choose to acquire Nox Bellcow Cosmetics to enter the cosmetics OEM industry and the selection criteria of M&A targets.Finally,this thesis analyzes Fujian Green Pine ’s mergers and acquisitions from three perspectives by using event research method,Tobin’s Q value method and EVA method.Based on the above analysis,this thesis sums up the enlightenment and lessons.In general,Fujian Green Pine can basically achieve the strategic goals of finding new profit growth points,stabilizing business cycle and realizing diversification through the merger and acquisition of Nox Bellcow Cosmetics.After the acquisition,the market responded positively,and the profitability,operation and growth capabilities of Fujian Green Pine have been improved,and the operating risks have also been reduced.In general,the diversified mergers and acquisitions of Fujian Green Pine are successful,but some risks existing after mergers and acquisitions should continue to be paid attention to.At the same time,this thesis also provides some suggestions for the problems that traditional industry leaders are prone to encounter in the process of mergers and acquisitions.Firstly,when traditional industries are deployed in emerging industries,the valuation of the target is often high.At this time,the value of the target assets must be carefully evaluated,and performance commitments and compensation agreements must be treated rationally to prevent the risk of goodwill impairment.Secondly,when the mixed payment method is adopted,the equity of the actual controller will be dispersed.Therefore,the proportion of mixed payment should be carefully planned,and shareholders should be regulated to reduce their holdings to avoid the state of no actual controller.Thirdly,enterprises should determine the selection criteria of M&A targets according to their own conditions to break through development difficulties,and especially pay attention to the market space,industry concentration,competitive advantage and the synergies between the two parties.Finally,enterprises should pay attention to post-merger debt management and be cautious about financing new businesses.