Research On The Performance Of BOE’s Acquisition Of CLP Panda

In recent years,due to the promulgation of the grand blueprint of Made in China 2025,the competition among Chinese manufacturing enterprises has intensified.In order to achieve the strategic goals of expanding the market scale,realizing synergies and acquiring core technologies in a short period of time,many enterprises try to enhance their competitiveness by merging resources.However,it is still unknown whether the enterprise can obtain the expected positive benefits after the completion of the merger event.BOE is a leading enterprise in the high-tech industry of China’s manufacturing industry.In order to alleviate the impact of the industry’s core technology monopoly,BOE decided to maintain its competitive advantage and consolidate its position through the merger of CLP Panda and its 8.5 and 8.6 generation industrial lines.Whether this merger can bring positive benefits to BOE is worth further study.In this paper,BOE’s acquisition of CLP Panda is selected as a case,based on the balanced scorecard analysis of its acquisition performance from four perspectives: finance,customers,internal process and learning and growth.First of all,from the perspective of short-term financial performance,the event study method is used to evaluate the effect of merger through market reactions such as the rise and fall of stock prices and the acquisition of excess cumulative earnings.Secondly,from the perspective of long-term financial performance,financial index analysis is used to carry out comparative analysis on profitability,liquidity,growth and security before and after the merger.Thirdly,economic added value method is used to evaluate BOE’s comprehensive performance before and after the acquisition after excluding the influence of input capital,and the results are compared with the results of traditional financial index analysis.Finally,the nonfinancial performance before and after M&A is compared from the perspectives of customers,internal processes and learning and growth,so as to obtain a comprehensive and objective evaluation of M&A performance.The results show that BOE’s short-term financial performance shows a negative trend after the merger,indicating that the market is not optimistic about its merger behavior.However,in the long run,due to the similarities between BOE and CLP Panda’s main business,it is convenient to carry out post-merger integration.After a period of integration,the short-term negative effects are neutralized and BOE’s overall benefits are improved.BOE achieved the acquisition objectives of acquiring core technologies to break technical barriers,expanding market scale to enhance its competitiveness and obtaining synergies to improve operating efficiency in this merger,and promoted the extension of the production chain and the integration of the upstream and downstream of the industrial chain,consolidating its leading position as a market leader.Therefore,this study believes that M&A should not be too troubled by short-term benefits,but should enhance long-term benefits through M&A integration.Finally,according to the results of the analysis of M&A motivation,M&A risk and M&A performance,this paper puts forward the corresponding management suggestions according to the implementation stage of M&A.Enterprises can reduce the overconfidence of the management by constructing and improving the corporate supervision and governance system,cultivating learning managers and introducing strategic investors,so as to increase the possibility of M&A risk caused by premium M&A.Pay attention to the free cash flow of the target enterprise and the fit degree with its own strategy before the merger and acquisition,so as to select the appropriate merger target;To determine fair M&A consideration according to the possible cash inflow of M&A to avoid unnecessary waste of resources;When paying consideration,financial risks can be reduced through diversified financing and payment methods to avoid capital shortage;After the merger and acquisition,we should attach importance to the integration of resources,obtain synergistic effect through the integration of efficient human resources,technology and production resources,and improve the efficiency of the merger and acquisition.