Case Study on the Performance of the Epistar M & A activities
|關鍵字:||併購;績效;發光二極體;Merger and Acquisition;Operating Performance;LED|
This study aims to investigate the relevance in Taiwan’s LED chip industry between M & A activity and business operating performance. Industry enterprises hope to achieve scale and growth through mergers and acquisitions, but under fierce competitive conditions, companies relying on constant mergers and acquisitions are unable to achieve sustainable long term businesses. Historically, majority of mergers and acquisition deals are deemed to be failures. However, Taiwan’s LED chip industry is able to overcome multiple obstacles including patent barriers set up by major international manufacturers, lack of market size and price competition from mainland Chinese companies and thrive in the market. Specifically we observe the acquiring company, Epistar, utilizing mergers and acquisitions to quickly reach market economies of scale. This study attempts to analyze the top three Taiwan LED chip manufacturers and explore and compare the change in operating performance of Epistar and the other two subject companies during the period of Epistar’s merger and acquisition activity. Financial data analysis indicates that compared to the other two subject companies, Epistar experienced significant growth in operating income, meanwhile maintaining similar debt to assets ratio and substantially higher earnings per share over periods of significant M&A growth. Long-term stock price analysis indicates that Epistar has demonstrated superior returns and reflects that Taiwan's LED chip industry can indeed improve operating performance through merger and acquisition activities.