Analysis of Risks in Corporate M&A: Evidence from Gree Electric Appliances Acquiring Yinlong New Energy
DOI:
https://doi.org/10.54097/hbem.v19i.12088Keywords:
Diversification strategy, cross-border M&A, M&A motivation, M&A risk, new energy vehicles.Abstract
Since the onset of the 21st century, amidst rising industry competition, dominant enterprises across various sectors have entered the market with substantial capital, in search of new market opportunities. They have implemented diversified growth strategies, engaging in cross-industry mergers and acquisitions. Nevertheless, mergers and acquisitions can be fraught with risks as well as rewards. On this basis, this study examines the case of Gree Electric Appliances' acquisition of Zhuhai Yinlong New Energy, detailing the acquisition process, and providing financial analysis of both entities. Based on the evaluations, it identifies and examines potential risks and their underlying causes during the acquisition. Reflecting the present circumstances, the paper draws conclusions and offers recommendations according to the analysis, presenting a pragmatic research approach for cross-industry mergers and acquisitions and assisting investors in predicting the future trajectory of the acquired company more accurately. These results shed light on guiding further exploration of corporation M&A.
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