Research On The Causes And Effects Of Cross-border M&A In Environmental Protection Industry

Since the 21 st century,with the prosperity of the global economy and the rapid development of the Chinese economy,many companies have gone abroad to participate in international investment activities,seeking new development opportunities.Cross-border mergers and acquisitions,as a way of foreign direct investment that quickly enters the host country’s market and obtains high-quality overseas technology,has always been the focus of domestic enterprises.As an emerging industry,the environmental protection industry has developed rapidly under the impetus of national policies in recent years.In order to seize industry development opportunities,many environmental protection companies have chosen cross-border mergers and acquisitions to increase their core competitiveness.However,in the raging wave of cross-border mergers and acquisitions,the environmental protection industry’s cross-border mergers and acquisitions are not progressing smoothly due to problems such as foreign political and legal restrictions,cultural differences,misselection of target companies,high pressure on M&A financing,and inadequate integration.Based on the above background,this article takes China Tianying’s cross-border merger and acquisition Urbaser as the research object to conduct a case study.First of all,this article analyzes the development status of the environmental protection industry from three aspects: industrial scale,industrial concentration,and popular subdivisions,and elaborates on the characteristics of the environmental protection industry.By collecting data on cross-border mergers and acquisitions in my country’s environmental protection industry from 2015 to 2019,summarize the status quo,characteristics and existing problems of cross-border mergers and acquisitions in the environmental protection industry.Secondly,this article analyzes the motivations of China Tianying’s cross-border mergers and acquisitions from the perspectives of supply chain,market and technology,and at the same time,it analyzes the M&A strategies adopted by China Tianying in the process of cross-border mergers and acquisitions.Next,this article uses the event research method to analyze the attitudes of market investors towards this merger and acquisition,uses the financial indicator method to analyze the financial performance of China Tianying before and after the cross-border merger,and analyzes the non-financial performance.Finally,from the three aspects of management,operation and finance,it explores the influence path of cross-border mergers and acquisitions on the performance of China Tianying.The research found in this paper:(1)In recent years,my country’s environmental protection industry has developed rapidly under the support of national policies.In order to expand the international market and obtain advanced technology,many companies have frequently acquired companies in the water and solid waste fields of developed countries in Europe and America.In order to seize industry development opportunities,China Tianying chose to acquire Urbaser across the border to build a complete solid waste management industry chain,obtain advanced solid waste treatment technology,expand the international market,obtain overseas financing and stable cash flow to enhance the core competitiveness of the enterprise.(2)In the process of cross-border M&A,China Tianying mainly adopted the target company’s selection strategy,merger fund establishment strategy,merger fund financing strategy,Earn-out clause payment strategy and post-merger integration strategy.(3)In terms of market response,China Tianying’s cross-border M&A event produced good market performance;in terms of financial performance,after the merger,China Tianying’s profitability,operating capabilities,growth capabilities,and short-term debt solvency were effective Increased,but the long-term debt solvency has declined;In terms of non-financial performance,this cross-border merger has effectively improved China Tianying’s domestic and foreign market position,technology research and development capabilities,personnel quality,and project development capabilities.(4)China Tianying basically completed the coordination of management,operation and finance this time.After the completion of this cross-border merger and acquisition,China Tianying’s management efficiency has been improved,while corporate management costs have also been effectively controlled;although economies of scale in production and services have not yet been formed,the company’s period expense ratio has declined.In addition,the mutual supplementation of the high-quality resources of the two companies has also comprehensively increased the company’s operating income;although the merger did not bring tax-saving effects to China Tianying,it effectively controlled the financing costs of the company.Finally,on the basis of case analysis,this article summarizes China Tianying’s experience in cross-border mergers and acquisitions,and provides references for Chinese companies preparing for cross-border mergers and acquisitions.