Advances in Economics, Management and Political Sciences

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Proceedings of Finance in the Age of Environmental Risks and Sustainability - ICFTBA 2024

Series Vol. 94 , 14 June 2024


Open Access | Article

Analysing the Motivation and Effect of Cross-border Mergers and Acquisitions: A Case Study of the Acquisition of YOUJIUSHIDAI by SHANGHAI ACE CO., LTD.

Yinhui Yu * 1
1 Institute of Business, Zhejiang Wanli University, No.8 South Qianhu Road, Yinxian Central District, Ningbo, China

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 94, 1-8
Published 14 June 2024. © 14 June 2024 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Yinhui Yu. Analysing the Motivation and Effect of Cross-border Mergers and Acquisitions: A Case Study of the Acquisition of YOUJIUSHIDAI by SHANGHAI ACE CO., LTD.. AEMPS (2024) Vol. 94: 1-8. DOI: 10.54254/2754-1169/94/2024OX0102.

Abstract

Under the background of globalisation and information technology revolution, cross-border mergers and acquisitions (M&A) have become a key strategy for corporate strategic transformation and market expansion. Taking the acquisition of YOUJIUSHIDAI by SACE as an example, this study adopts the methods of literature review, case study analysis and AMPS model to explore in depth the motives, effects and impacts of cross-border M&A on corporate performance. This study finds that although M&A enhances shareholder wealth in the short term, long-term profitability falls short of expectations, which is mainly limited by the lack of R&D capability and market alignment problems. This study emphasises the importance of synergies and points out that high-premium M&As may lead to goodwill impairment risk, thus affecting the financial status of the firms and the interests of shareholders, and puts forward suggestions to optimise M&A strategies and strengthen regulation, in order to protect the interests of small and medium-sized investors and to promote the healthy development of the capital market.

Keywords

Cross-border mergers and acquisitions, High premium mergers and acquisitions, shell listing, Synergy effect, Performance commitment

References

1. Gao, K., Qi, X., & Di, J. (2022) Strata Regression Analysis-Based Research on the Impact of High-Premium M&A Goodwill on Profitability and Enterprise Value. In 2022 International Conference on Bigdata Blockchain and Economy Management (ICBBEM 2022), 1465-1476. Atlantis Press.

2. Menghan, Z. (2021) Research on the Impact of Performance Compensation Commitment on Backdoor Listing Companies Earnings Management. In E3S Web of Conferences, 253, 02066. EDP Sciences.

3. Qu Yuanyu, Wu Satellite,Shen Tao.(2018) IPO or Shell: What Influences the Listing Choice of Chinese Firms?. Management World, 34(09): 130-142+192.

4. Mingxi Y, Robert T. (2023) Cross-border mergers and acquisitions: a double-edged sword for Chinese firms' innovation performance. Cogent Social Sciences, 9(2).

5. Ke N. (2023) Analysing the Financial Synergy Effect of Corporate Mergers and Acquisitions -Yili's Acquisition of Ausnutria. Research in Economics and Management,8(3).

6. Liu Xiaogang. (2023) Cross-border M&A Performance Commitment, Selective Avoidance of Impairment Losses and Protection of Small and Medium-sized Investors-A Case Study Based on Delisted Youjiu. Finance and Accounting Newsletter,12, 100-106.

7. He Shan. (2019) Research on the Transformation Performance of Traditional Enterprises' Internet Mergers and Acquisitions--Taking Telegraphic Media as an Example. Finance and Accounting Newsletter, 08, 61-65.

8. Yang Yi. (2016) Research on the Motivation and Performance of Cross-Industry Mergers and Acquisitions of Listed Companies. Jinan University.

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Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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Volume Title
Proceedings of Finance in the Age of Environmental Risks and Sustainability - ICFTBA 2024
ISBN (Print)
978-1-83558-487-3
ISBN (Online)
978-1-83558-488-0
Published Date
14 June 2024
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/94/2024OX0102
Copyright
14 June 2024
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

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