Study On The Effect Of Cross-border M&A Under The Globalization Strategy Of H Company

In recent years,the world economy has been in recession and counter-globalisation is on the rise,while the Chinese government is actively promoting the "Belt and Road" construction and deepening the structural reform on the supply side.More and more home appliance companies are opting for cross-border M&A to enhance their value.However,most of them are not experienced in cross-border M&A,and there are cases of failed M&A.As a result,there has been a great deal of interest from both the business and academic communities in promoting successful cross-border M&A.Company H started its cross-border M&A journey in 2010 and has now established a leading position in the global home appliance industry.Therefore,this paper analyses and evaluates the effects of multiple cross-border M&As in the context of Company H’s globalisation strategy,combining theory and practice.This paper examines the relationship between the implementation of globalisation strategy and the effects of cross-border M&As,based on a study of the factors influencing the promotion of globalisation strategy,the performance of cross-border M&As and the evaluation methods of the company,combined with relevant theories.In terms of the implementation of globalisation strategies,the four M&As are divided into two categories according to the different needs of corporate development,and the background,motivation,process and effects of each category are introduced.The first category is brand integration to acquire technology.H acquired Sanyo’s home appliance business,leveraging advanced technology to promote the development of its own brand and accelerate the pace of internationalisation.H joined forces with Kadi to lay a strong foundation for the implementation of the next global eco-branding strategy in Europe,relying on Kadi’s R&D strengths in smart home appliances.The second category is the integration of categories to gain market access.Company H perfected its product categories by acquiring world-renowned kitchen appliance brands Fisher & Paykel and General Electric,and increased its foreign market share significantly after the acquisition.In terms of the effects of cross-border M&A,the study was conducted systematically from three perspectives:short-term market performance,financial indicators and changes in corporate value.The event study method is used to analyse the short-term market response to the four M&As;12 financial indicators of Company H and industry averages from 2011 to 2020 are selected for longitudinal analysis and cross-sectional comparison to explore the changes in profitability,operating capacity,solvency and growth capacity brought about by the M&As;the economic value added,economic value added return and market value added are calculated to analyse the changes in corporate value generated by the M&As.The study also analyses the changes in value generated by M&A activities by calculating economic value added,economic value added payoff and market value added.The results of the study show that the implementation of Company H’s globalisation strategy has been smooth and effective.The four cross-border M&A events have been well received in the short-term market,the long-term performance of the firm has been improved,the overall value of the firm has been increasing,the efficiency of capital in creating value has been steadily increasing,and the M&A has created additional value for the capital market.Finally,the effects of cross-border M&As are summarised and recommendations are made to address the shortcomings,and the M&A experience of Company H can serve as a reference for other companies undertaking cross-border M&As.