M & A Financial Performance Analysis

Abstract

With the deepening of economic globalization and the rapid growth of China's overseas investment scale, in order to quickly introduce foreign advanced technology, well-known brands and effective management experience, more and more mainland Chinese enterprises are engaged in the wave of overseas mergers and acquisitions. Made in China 2025 also provides policy support for overseas mergers and acquisitions. This paper takes the case of Midea Group's acquisition of Toshiba household appliances as a typical case of China's overseas M&A, and studies its post-M&A performance, which has a reference significance for overseas M&A in the same industry. First of all, the paper summarizes the domestic and foreign M&A theoretical achievements from the perspective of the motivation, the process and the effect of M&A, providing a solid theoretical basis for the analysis and evaluation of the following article. Secondly, introduce the case of Midea Group's acquisition of Toshiba home appliances, and use the Event Study to calculate the abnormal returns and the cumulative abnormal returns before and after Midea's acquisition of Toshiba home appliances. It is concluded that the market has a positive expectation for this acquisition. Then the paper uses financial index analysis to evaluate the long-term performance after the M&A. Based on the annual report data of Midea Group from 2013 to 2017, the paper calculates the Midea Group's development ability, profit ability, debt paying ability, operation ability and shareholder profitability before and after the M&A. In the end, the financial performance of the acquisition was evaluated objectively, which inspired us. This paper puts forward some prospects and suggestions for the overseas M&A of China's manufacturing industry, hoping to provide some reference value for the overseas M&A of China's manufacturing enterprises.