Research On The Motivation And Effectiveness Of Successive Cross-Industry Mergers And Acquisitions Of Yihua Health

With the gradual improvement of the economy since the reform and opening up,China’s traditional real estate industry has also started to develop rapidly since the 1990 s,and the number of real estate enterprises has gradually climbed higher and higher,and the market competition has become increasingly fierce.In order to maintain the stability of the real estate market,strict state regulation of the real estate market has followed.With the economic downturn and fierce competition in the real estate industry,many real estate companies have joined the wave of mergers and acquisitions to protect themselves from risks and maintain sustainable development.As a typical representative of continuous cross-industry M&A,Yihua Health has made a comprehensive transformation from the real estate industry,completely divested itself of the former real estate industry strategically,and expanded in new industries through continuous M&A.It is important to study Yihua Health as a case study company for its rapid layout of the industrial chain to improve its business scope within three years.This paper starts from the cross-industry consecutive M&A events of Yihua Health from 2014-2021.First,it outlines the case subject,industry background,and the subject of the M&A;combined with the actual situation of Yihua Health and the compiled literature review of M&A motives and related theories,it explores the M&A motives behind the company’s consecutive M&A;then,it studies the effects of Yihua Health’s cross-industry consecutive M&A,using the event Then,we analyze and evaluate the long-term effects of YIHUA Health’s cross-industry M&A by using the event study method to analyze its short-term effects and the factor analysis method and the economic value added method to compare the long-term effects of YIHUA Health’s cross-industry M&A.Finally,we draw conclusions and make recommendations based on the above findings.Finally,based on the results of this study,we conclude that IHH has not only failed to achieve good business performance in the former real estate industry,but also failed to turn around in the new industry after successive cross-industry mergers and acquisitions.In terms of short-term effects,investors recognize YHH’s strategic transformation through successive M&As across industries and have given a good market response.However,in the long term,the cross-industry M&A did not have a positive effect on the company’s value,both horizontally and vertically.At the end of this paper,we propose some suggestions for the analysis of this case,and hope that this case will provide some reference value for other companies with similar characteristics or companies that are planning to make similar strategic moves to improve the sustainability of the company.