Research On The Faction Enterprises Mergers And Acquisitions Among Related Party And Its Economic Consequences From The Perspective Of Internal Capital Market

Over the years,driven by multiple external forces such as external financing constraints and increased investment opportunities,private enterprises have gradually developed and established a large number of affiliated enterprises in China.The operation of internal capital market of affiliated enterprises has an increasingly critical impact on the operation and development of affiliated enterprises.Through statistics,the author finds that internal equity transfer,a related m&a behavior,appears more and more frequently in the internal capital market resource allocation of family enterprises in recent years.The deep logic behind this phenomenon and its influence are worth further study.According to previous studies by scholars,related party transactions are an important way to run the internal capital market of affiliated enterprises.However,related party transactions at the general business level have limited impact on economic consequences,because these related party transactions are mainly the implementation of "financial decisions" made by managers.Related merger involves the adjustment and merger of resources between enterprise subjects,and it is the implementation of "strategic decision" made by enterprise management.A higher amount of m&a,the process will be more complicated,with the occurrence of m&a,human resources,financial resources,research and development ability,professional technology,product lines,sales channels,other tangible intangible assets,and so on resources will be among the internal capital market will be reconfigured,the transfer of internal resources and integration,It is bound to have a far-reaching impact on the family enterprises.In this paper,Midea department is selected as the case study object.The related mergers and acquisitions in recent ten years are important ways for Midea Department to adjust and reintegrate internal resources.This paper analyzes three typical cases of related mergers and acquisitions of Midea Department from the perspective of internal capital market.Analysis results showed that beauty of m&a behavior is cause changes in the external market competition environment,family members within the enterprise,the industrial structure of business model is facing the challenge,is the enterprise value of listed companies within the underestimated,related party transactions between member enterprises frequently,the risk of relying on a potential problem such as competition,For the purpose of optimizing the internal resource allocation of the family enterprise and helping the realization of the overall development strategy of the family,the headquarters of the family is launched.Through the internal capital market platform,Midea realized the internalization of many key information and contracts that determine the success of m&a in external capital market,alleviating the information asymmetry of both parties and making the subsequent integration of both parties smoother.In the three related mergers and acquisitions of Midea,there were related transactions between midea and Midea before the final merger,and the related transactions were eliminated after the related merger.Midea Group’s acquisition of Midea Electric Appliance is the result of financial strategic decision.After the acquisition,high-quality assets are listed,which sends a positive signal to the external capital market and enhances the external financing potential of the listed platform.Midea group’s absorption and merger of Wheeling Holding is the result of professional and integrated strategic decision,which helps Wheeling achieve rapid strategic transfer,and uses the existing assets of the family to help Wheeling achieve rapid change of business model and realize diversified operation.Midea also successfully achieved layout of new energy automobile industry.Midea group’s acquisition of Cygnet is the result of professional and diversified strategic decision,which breaks through the development bottleneck of both sides,avoids the potential risks of industry competition and achieves a win-win situation.Three related mergers and acquisitions have brought positive synergies for Midea department,such as operation synergies,management synergies and financial synergies.The three related mergers and acquisitions did not bring too much financial pressure to the group that owns and merges Midea.Therefore,midea is capable of carrying out non-related mergers and acquisitions in the external capital market while adjusting and integrating related mergers and acquisitions in the internal asset market,constantly realizing diversified business development,entering new industries and realizing global layout.After related merger and acquisition,the allocation efficiency of internal capital market may decrease in the short term,but it still brings positive economic consequences in the medium and long term with the gradual development and maturity of related business fields and the gradual improvement of competitiveness.For is a family enterprise m&a to the correct specifications and guidance,can play its ease the information asymmetry problem between mergers and acquisitions,mergers and acquisitions saving cost,speed up the acquisition and integration of speed,improve the probability of successful merger integration,power is a family enterprise to open up new areas such as advantage,is conducive to better play to the role of the is a family enterprise internal capital markets,So as to enhance the sustainable management and development ability of the family enterprises.