Performance Analysis of the Acquisition of BBHI by Suzhi Technology
DOI:
https://doi.org/10.6981/FEM.202410_5(10).0010Keywords:
Merger and Acquisition; Performance Analysis; Merger and Acquisition Risk.Abstract
In 2016, under the background of intensified competition in the domestic communication infrastructure industry, declining gross profit rate, rising labor cost, and gradual decline in the overall profitability of the industry, Suzhi Technology adopted an extended strategy to acquire BBHI at a high premium, hoping to achieve strategic transformation and improve corporate profitability. This paper is based on information asymmetry, diversified management, synergistic effect and signal theory. Using case study, event study and financial index analysis as research methods, this paper analyzes the reasons and economic consequences of overseas high-premium M&A of Suzhi technology companies. Through the research, this paper finds that in the short term, the short-term capital response, short-term financial performance and non-financial performance of the technology respond well, and bring profits and technology to the enterprise in the short term. However, from the long-term analysis, this merger makes the stock price and profit of Suzhi far lower than the level before the merger, and the long-term capital market reaction and financial performance are poor, so it faces the risk of delisting. This paper hopes to provide some specific suggestions for numerical technology and BBHI, hoping to provide cases for benign mergers and acquisitions of GEM enterprises.
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