The Influence Of M&A On Enterprise Value

With the continuous enhancement of China’s economic strength,Chinese enterprises have gradually mastered the initiative and discourse power in foreign investment.More and more enterprises adopt the way of cross-border merger and acquisition to respond to the call of the country to "go global",and the pace of enterprise globalization has become faster and more stable.In recent years,with the continuous expansion of cross-border mergers and acquisitions in China,people no longer focus on the number of cross-border mergers and acquisitions,but also pay more attention to the performance and future development potential of enterprises after cross-border M&A.Through combing the literature found that more and more scholars to study enterprise transnational merger and acquisition,most previous studies using the method of empirical analysis,through the collection and analysis of information and data before and after the merger and acquisition,using financial indicators to measure enterprise performance changes before and after M&A,but in the value of the enterprise M&A events,especially on the impact of enterprise value,No consensus has been reached.In recent years,the market size of the home appliance industry has been growing slowly,and affected by the COVID-19 epidemic,home appliance enterprises try to find target companies that fit their own strategies through mergers and acquisitions to achieve synergy.The main body of this case study--Hisense Home Appliances acquired the core technology of Japan Sanden in the field of automobile air conditioning through cross-border M&A,and gained the "stepping stone" to enter the field of new energy vehicle air conditioning.On the one hand,it realized its new business growth point and broke through the "ceiling" of home appliance industry;On the other hand,it will help the company further globalize and finally achieve win-win cooperation.Specifically,after clarifying the purposes and risks of the M&A of Hisense,this paper comprehensively analyzed the operating and financial conditions of Hisense,combined with the macro background,industry development status and trend,and considered the long listing time,stable operation and mature development of Hisense.The free cash flow method is used to evaluate the enterprise value before and after merger and study the influence of merger and acquisition activities on the enterprise value of the acquiree and the reasons for the change of enterprise value.Final results show that the merger and acquisition activity make acquisitions-Hisense electrical appliances enterprise value increase,increase the enterprise value comes from Hisense appliances improve profitability after the merger and the company’s business scope expanding,in addition,the realization of synergies to enhance the bargaining power and the global competitiveness of the enterprise itself,to a certain extent reduce the cost of enterprise.Finally,this paper also suggests that traditional home appliance enterprises can learn from Hisense’s experience in mergers and acquisitions,pay attention to seize the opportunity,make full research,and actively seek corporate strategic upgrading.