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

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.