Research On The Financial Synergy Effect Of Gigadevice’s Mergers And Acquisitions Of Silead

As the global economy continues to develop and market competition intensifies,the business development of enterprises is tested by both the market economy and the ever-changing social supply and demand.Nowadays,the rise of China’s economic strength has attracted allround suppression from Western countries,forcing domestic enterprises to respond to the complex international market environment again.Traditional corporate giants need to find a way to accelerate their expansion in order to achieve technological breakthroughs,eliminate outdated technologies and production capacity,and expand market share in new markets,which has led to a dramatic increase in the number of mergers and acquisitions,but most of them have ended in failure.With the rise of integrated circuits(IC),the industry has gradually increased in status and has become a strategic national industry,and the number of mergers and acquisitions of related companies will continue to increase.At present,there is very little literature on the study of M&A cases in IC industry from the perspective of financial synergy in China,to fill this gap to some extent,this thesis selects a typical representative of IC industry,the case of Gigadevice’s M&A of Silead,to study the financial synergy effect of this M&A.This thesis uses a combination of theoretical and case studies to investigate whether the case of Gigadevice’s acquisition of Silead generates financial synergy effect.In the section of theoretical analysis,the thesis starts from the concept of M&A and financial synergy,borrows a large amount of domestic and international literature on M&A-related research,explores the research perspectives,significance and approaches of scholars,and categorizes all the research.Efficiency theory,strategic management,tax effect,and free cash flow theory are used as theoretical bases and become important guides for the thesis.In the section of financial synergy analysis of the M&A case,the thesis firstly introduces the external market environment and the development background of the company,the corporate profiles of Gigadevice and Silead,the detailed plan of this M&A event and the M&A process,as well as the reasons for the M&A of Silead from the national and corporate levels respectively.Then,the thesis will judge whether the M&A case has produced financial synergy effect from four perspectives: the change of financial indicators before and after the M&A,the cash flow performance of financial synergy,the tax-saving effect of financial synergy,and EVA evaluation,supplemented by the data collected.Through the analysis of the thesis,it is found that the indicators of Gigadevice after the completion of the M&A can visually reflect the qualitative improvement of the overall strength of the enterprise,with enhanced profitability,increased profit channels,enhanced solvency,more rational operations,sufficient corporate capital,significantly improved cash flow reallocation,high revenue and low taxation of new products,and stable increase in enterprise value.This leads to the conclusion that the M&A generates financial synergy effect and that the financial synergy effect is clearly demonstrated.Finally,based on the analysis process and conclusion of the M&A case,the thesis proposes insights and lessons learned in terms of accurate assessment of the value of the acquired company,a perfect M&A plan through thorough research beforehand,rational selection of the target company,avoidance of possible M&A risks,resource integration and effective allocation through M&A,improvement of costprofit relationship,and optimization of financing structure to make full use of idle capital.