Study On The Motivation And Performance Of Tianji’s Cross-Industry Mergers And Acquisitions

Every enterprise will experience a process from budding growth to mature decline.When it reaches a certain scale,it will face problems such as market saturation and declining competitiveness,resulting in slow or even stagnant development.In recent years,driven by the wave of economic diversification,more and more enterprises with excess capacity or restricted profit growth adjust their industrial structure through cross-industry mergers and acquisitions to achieve strategic transformation and sustainable development.However,since the main industries of the two sides of the cross-industry merger are enterprises with very low similarity,it also increases the integration risk after the completion of the merger.Therefore,whether cross-industry mergers and acquisitions can play a synergistic effect,improve the performance of enterprises and enhance the competitiveness of enterprises has become the focus of attention of many enterprises with the intention of transformation.Based on this background,this paper selects traditional manufacturing enterprises in the cross-industry merger and acquisition of new energy automobile industry for analysis.The new energy automobile industry is one of the strategic emerging industries in China,and there are few theoretical studies on the cross-industry merger and acquisition into the field of new energy.It is hoped that the research in this paper will enrich the theoretical system of the cross-industry merger and acquisition of new energy enterprises under the relevant background.First of all,by combing the viewpoints of domestic and foreign scholars on the motivation and performance of merger and acquisition,combining the synergy theory,diversification theory and enterprise growth cycle theory,this paper selects the case of Tianji Stock’s cross-industry merger and acquisition of Xintai Material as the research object,takes the motivation of merger and acquisition as the entry point,and summarizes three motivations of Tianji Stock’s cross-industry merger and acquisition through analysis:Driven by government policies,entering the new energy industry;Improve profitability and reduce operating risks;Start the development of two main businesses,to achieve diversification.Then,using event research method,economic added value method and financial index analysis method,combined with non-financial index analysis method,from the short-term performance and long-term performance of Tianji stock after the merger of Xintai Material to conduct a comprehensive analysis,through the vertical comparison of the enterprise’s own performance changes before and after the merger,and horizontal comparison with other enterprises without merger.It is found that in the first few years after the completion of the merger,the performance is not ideal,with various indicators declining to varying degrees and even producing negative performance.From the 2021 onwards,business performance has improved and recovered.Finally,in view of the performance results,this paper analyzes the existing problems in merger and acquisition,mainly including the huge goodwill impairment caused by high premium merger and acquisition,the influence of industry policy environment on the development and the bad consequences caused by the urgent business transformation after merger and acquisition.In view of the problems found in the process of analysis,three suggestions are put forward: evaluate the value of the target company reasonably;reasonably integrate and plan the development of old and new businesses;formulate a scientific development strategy.Through the analysis of the above merger and acquisition cases,we hope to provide a way for the traditional manufacturing enterprises that take the transformation route through merger and acquisition in the future,and help the enterprises to make reasonable merger and acquisition decisions.