Research On Goodwill Impairment And Economic Consequences Of Joyson Electronics’ High Premium Merger And Acquisition Of KSS

According to the trend of development and changes in the economic market,the government of China has formulated a number of policies on external M&A and restructuring of enterprises,and enterprises have chosen to develop and expand their businesses by means of external M&A.Most of the enterprises in the auto parts manufacturing industry have also become a member of the M&A wave with the introduction of the policy.Although external M&A brings convenience to the development of enterprises,it also brings a series of problems such as high consideration paid for M&A and difficulties in measuring goodwill impairment provision.In this paper,we mainly refer to the previous literature and analyze the case study,based on the previous research on goodwill impairment and the case study of the merger and acquisition of KSS in the United States.Based on the basic situation of the auto parts manufacturing industry,the paper firstly introduces the case of the M&A company(Joyson Electronics)and the M&A company(KSS);then,based on the relevant research of scholars,the reasons for the huge goodwill impairment of Joyson Electronics and the problems that exist,such as the high valuation of the company’s M&A leading to the high premium,the company’s failure to integrate the M&A resources in a timely manner,and the company’s management using the goodwill impairment for surplus management.The company’s management uses goodwill impairment for surplus management and so on.At the same time,the economic consequences of the large goodwill impairment of Joyson Electronics are analyzed by two methods: event study method and financial performance index method.Finally,the thesis makes relevant suggestions on how to reasonably reduce the occurrence of large goodwill impairment,suggesting that the company improve the value assessment process of the target enterprise,enhance the post-merger resource integration efforts and strengthen the internal monitoring of surplus management.In addition,we suggest listed companies in the auto parts manufacturing industry to refer to and adopt the relevant suggestions to help the industry enterprises reasonably reduce the occurrence of large goodwill impairment and thus promote the sound development of the industry.