| With the accelerated development of science and technology in recent years,the development of many traditional industries has been greatly impacted.Thanks to the emergence of new hotspots such as 5G communication,new energy vehicles,cloud computing,and other related industries such as electronic information has become a new economic growth point.Therefore,the country also introduced a series of support policies for the development of these industries,to promote the rapid development of electronic information technology,high-end equipment manufacturing and other strategic emerging enterprises.Electronic components industry as the cornerstone of the development of the above industries,risks and opportunities coexist.In this context,more and more enterprises in the electronic components industry began to achieve scale expansion and resource integration by means of mergers and acquisitions.The paper first reviews the literature on the motivation and performance of mergers and acquisitions,and selects the case of two mergers and acquisitions of Yuan Sheng Electronics by Zhongjing Electronics based on synergy theory,market power theory,and economy of scale theory.Then,we analyze the motivation of the two mergers and acquisitions of Zhongjing Electronics.The motivation of Zhongjing Electronics’ mergers and acquisitions is to seize the industry development opportunities,achieve the company’s strategic development goals,and realize the synergy effect through resource integration;finally,we use the event study method to investigate the reaction of the capital market;we combine the financial indicators to analyze the synergy effect after the mergers and acquisitions.Finally,the event study method was used to investigate the capital market reaction;the synergistic effects after the M&A were analyzed by combining the sub-financial indicators;and the long-term financial performance after the M&A was evaluated by using Du Pont and EVA analysis.The results of the two mergers and acquisitions show that:(1)the cumulative excess return of Zhongjing Electronics increased after the second merger,and investors were bullish about this merger and acquisition event.This indicates a positive capital market response for Zhongjing Electronics.(2)Analysis of the synergy effects generated by the M&A reveals that the operating income has been continuously increased after the two M&As;the synergy effects in the operation,management and financial aspects of Zhongjing Electronics after the first M&A are significant.The synergistic effect was also generated in the early stage after the second M&A,but declined two years after the M&A.(3)Using Du Pont analysis,it was found that the profitability of CJEC improved after the first acquisition,and the upward trend was also generated in the early stage after the second acquisition,but declined two years after the acquisition.Using factor analysis,it was found that the increase in return on net assets was mainly driven by the increase in equity multiplier and net sales margin.Improving the return on shareholders’ equity is mainly a matter of rational use of financial leverage as well as improving corporate profitability.(4)EVA analysis was conducted and the calculation results showed that the company’s economic value added achieved growth after both acquisitions,and although the data fluctuated in the two years after the second acquisition,it was greater than the value before the acquisition.Overall,Zhongjing Electronics has achieved its own strategic goals through the two acquisitions of Yuan Sheng Electronics,which has improved the company’s shareholder value in the short term,but the long-term effect is not obvious.Finally,the paper makes four recommendations: first,to determine a feasible development strategy;second,the company should choose the right timing of M&A and the subject company when M&A;third,to choose the payment method flexibly;fourth,to pay attention to the post-merger integration and give full play to the synergy effect. |
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