How to build core competitiveness through mergers and acquisitions

The purpose of mergers and acquisitions is to reduce costs, expand market share, and realize the optimal allocation of resources through mergers and acquisitions. After the completion of the acquisition of the target company, the goal of the merger and acquisition is far from being reached, and the key to whether the merger and acquisition enterprise can truly achieve the merger and acquisition goal lies in the integration of the merger and acquisition enterprise. Through mergers and acquisitions, the assets of the enterprise are recombined, the core competitiveness of the enterprise is enhanced, and the non-Chinese business can be effectively divested to improve the efficiency of assets.

While the core competitiveness is formed, there should be corresponding countermeasures to deal with inefficient assets or subsidiaries. For companies with poor operating performance and financial status, the first step after the merger is to dispose of unnecessary assets, quickly stop production lines with low profitability, and take measures to reduce costs in every possible way. In fact, resale after mergers and acquisitions is a common phenomenon in foreign countries, and there are two main ways to operate:

One way is to split the assets of the acquired enterprise immediately after the merger and acquisition. Many cases of leveraged buyouts are carried out on the basis of a strong profit from the sale of assets. Another method is not to dismantle the assets of the acquired enterprise after the merger and acquisition, but to appoint management experts, financial experts and various technical experts to transform it, and then sell it to make profits.

Generally speaking, its target business is often those companies that are financially in crisis but still have profitability, as long as the appropriate investment after the acquisition, after repackaging**, can bring huge profits to the acquired enterprises. Asset restructuring can be carried out in various forms such as **, purchase, replacement, trusteeship, repurchase, and contracted operation: non-performing assets and non-operating assets can be repurchased by the original controlling shareholder of the acquired enterprise, which not only improves the company's asset quality, but also reduces the actual cost and cash outflow of the company's mergers and acquisitions.

Enterprises with high asset content, poor profitability and even long-term losses, and short-term difficulties in turning around losses can be given priority**. For enterprises with stable profits, the original controlling shareholder or the original management personnel have operational and management advantages but do not conform to the scope of industrial development, the operation of the original controlling shareholder or the original management personnel may be considered. For assets that are in line with the industrial development strategy determined by the acquirer and can quickly improve the company's asset quality and increase the level of profitability, it can be considered to directly purchase the company.

For industries with strong complementarity between the acquirer and the company, assets can be replaced through Guanyangguan Avenue. Regardless of the method of asset restructuring, three basic principles should be adhered to:

1.Distinguish between the main and non-main businesses of the two parties to the merger and acquisition, and divest the non-main business;

2.After the merger and acquisition, the enterprise has a good return on investment;

3.It is conducive to the common development of both parties to the merger.

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Competitiveness studies.

OverviewM&A refers to the merger and acquisition of enterprises, which is an economic behavior in which an enterprise purchases part or all of the assets or equity of another enterprise in cash, ** or other forms to obtain control of the enterprise.

What to study. As a way of enterprise development strategy, it is extremely important for M&A to make correct strategic decisions and formulate scientific strategic plans. After the top management of the company has made a decision and made a plan, they start to search for the target company, seek M&A opportunities, and after finding a suitable target company, they must also investigate and analyze it, and evaluate it before finally deciding on the target of the merger. "Knowing oneself and knowing one's opponent is not invincible", it is not enough to understand the situation of the enterprise itself, but also to clearly understand the real situation of the target company.

Only in this way can we select target enterprises that are in line with our own development strategy, formulate effective target plans, and lay the foundation for successful mergers and acquisitions.

To select the target company, we must first analyze and evaluate the business environment and business status of the enterprise, including the financial status, operation management, personnel organization, market share, etc., so as to provide data and lay the foundation for the future operation of the enterprise and the value of the enterprise. After understanding the current business status of the enterprise and evaluating the value of the enterprise itself, it is necessary to judge the future development direction of the enterprise in order to correctly select the target object of the desired merger and acquisition.

Basic framework. Chapter 1: Global Industry Development Status and Prospects.

Including industry overview, PEST environment analysis, each link of the industrial chain, market capacity, supply and demand, market competition pattern, development trends, development trends of major countries, etc.

Chapter 2: The operating performance and competitiveness of the world's leading manufacturers.

Chapter 3: Current Situation and Prospects of China's Industrial Development.

Including industry overview, PEST analysis, each link of the industrial chain, market capacity, supply and demand, market competition pattern, development trend, etc.

Chapter 4: Operating Performance of Leading Chinese Manufacturers.

Including product category, output, production capacity, sales volume, sales revenue, assets, liabilities, cost of sales, sales expenses, financial expenses, management expenses, asset turnover rate, gross profit margin, human resources, technology research and development, etc.

Chapter 5: Global and China M&A Overview of the Industry.

Including the overall situation, relevant policies, and development prospects.

Chapter 6: Global and China M&A case analysis.

Including successful experiences and lessons from failures.

Chapter 7: Development Status of Acquisition Initiator and Acquisition Target Enterprises.

Including product category, output, production capacity, sales volume, sales revenue, sales channels, gross profit margin market position, market penetration, human resources, technology research and development, etc.

Chapter 8: Identification of the value of the target enterprise.

Including influencing factors, cost method, market method, real option method, etc.

Chapter 9: M&A Feasibility Analysis.

Including relevant policies, M&A value, M&A feasibility, problems and risks faced, etc.

Chapter 10: Perspectives and Recommendations.

M&A refers to the act of an enterprise purchasing all or part of the assets or property rights of another enterprise to control and influence the purchased enterprise in order to enhance the competitive advantage of the enterprise and achieve its business objectives.

Enterprise mergers and acquisitions are generally divided into horizontal mergers and acquisitions, vertical mergers and acquisitions and mixed mergers and acquisitions.

Horizontal mergers and acquisitions belong to product expansion, merging manufacturers of related products in the same industry;

Vertical mergers and acquisitions belong to the market expansion type, including forward and backward two, that is, mergers with raw material suppliers and sellers;

Hybrid M&A can combine the first two.

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What is M&A strategyM&A strategy refers to the purpose of M&A and the way to achieve that purpose, including determining the purpose of M&A and selecting M&A targets. M&A targets directly affect the choice of cultural integration model. The type of M&A strategy has an impact on the cultural integration model.

In a horizontal merger strategy, the acquirer will often inject some or all of its culture into the merged enterprise to seek operational synergies. However, under the strategy of vertical integration and diversified merger, the intervention of the merging party in the merged party is greatly reduced. Therefore, in the case of horizontal mergers, the merging parties often choose the alternative or convergent cultural integration model, while in the case of vertical mergers and diversified mergers, the promotion or isolation cultural integration model is more likely to be chosen.