Analyzing Enterprise Valuation of Mergers and Acquisitions (M&A) and Reorganization

References

Cite

Share

Abstract

In terms of annual gross tonnage, China's shipbuilding sector ranked second in the world in 2019. CSSC integrated the industrial chain through M&A, eventually becoming the world's first shipbuilding group six years later. The purpose of this research is to investigate if the third merger and reorganization are propelling CSSC to become the world's first shipbuilding group. This article will utilize the event observation method and financial accounting analysis to investigate how the third merger and reorganization affected CSSC's value. The third M&A restructuring announcement has boosted market participants' expectations for the industry and CSSC's future prospects. However, CSSC faces pitfalls. First, the current absence of net profit implies that the underlying business is lucrative. If CSSC intends to pursue future M&A, it may need to lower its current asset-liability ratio to a more secure level in order to improve the competitiveness of its primary activities and increase profitability.