A Research On Market Reaction To Chinese Listed Enterprises' Serial M&As

In recent years, the M&A market in China had got great development. The merger and acquisition deals those done by listed companies have been increasingly active. With the fast growth of the number of merge and acquisition deals, the frequency of individual listed enterprises'M&A trades also improved quickly. For example, Yatai Group (600881) did 11 deals from 1998 to 2002. Actually, under the whole development projection for the listed enterprises, M&A has became a normalized capital operating method, which has show consistency and persistency. The M&A market in China has got a new character, which is changing from single deal to serial M&As, while the results got from single M&A maybe not siutbul for serial M&As. Therefore, listed enterprises'serial M&As have became a new phenomenon which deserving some researches.Although foreign researchers have noticed the phenomenon and done some study, their view focusing the management of listed companies. And Chinese researchers have not started the relative researches. Therefore we think it is necessary to researching market reaction specific to listed enterprises'serial M&As. Firstly, as the supplement of single M&As, we can enlarge the M&As theories. Secondly, we can explain some phenomenon reasonably. Thirdly, we can provide dependable basis for listed enterprises' expanding projects as well as the study of investors'mind and behavior.This paper takes the perspective of listed enterprises'serial M&As as the cutting point of discussing market reaction. The main work and conclusions of this paper are:First of all, connotation analysis——this paper analyzes the meanings of serial M&As and market reaction. On the one hand, this paper analyzes serial M&As from theoretical study and empirical study. On the other hand, this paper differ market reaction as the changes of stock price after the first declaration date with the performance of operation.Secondly, influence factors'research——this paper respectively analyzes possible factors which would impact market reaction to listed enterprises'serial M&As from the behaviors of investors as well as managers, trading pattern, the industry characters, government intervention.Thirdly, the establishing of short-term market reaction model——based on the DHS model, this paper establishes the revised DHS model (f—DHS market reaction model) for serial acquisitions which are differentiated by the result of the first deal.Fourthly, the emprical test of short-term market reaction model——this paper emprically tested f—DHS market reaction model and several critical factors with Chinese listed companies data from 2000 to 2009.Fifthly, the establishing of long-term market reaction model——based on the conclusion of short-term analysis, this paper establishes the long-tern market reaction model (SYS—GMM market reaction model) basing on the dynamic panel data model.Sixthly, the emprical test of long-term market reaction model——this paper emprically tested forecasted SYS—GMM market reaction model with Chinese listed companies data.With the relative research conclusion, the innovations of this paper line in:Firstly, the paper getting rid of the constraint of single deal, chooses the new trend of China's M&A market—serial M&As as the reaserch topic and explor the meaning of it.Secondly, different from forgrin reaserchers foucsing on management, this paper from a new point of view—investors to do some study. It would enlarge the theory of serial M&As.Thirdly, according to the increasing of acquisition orders, the changing of investors'mind as well as influence factors, this paper separates the market reaction to short and long. Then we establish the short-term market reaction model (f—DHS market reaction model) and the long-term market reaction model (SYS—GMM market reaction model).Forthly, this paper empirically tests f—DHS market reaction model and SYS—GMM market reaction model. Since the relative conclusion has some guidance to our listed enterprises' project of serial acquisitions as well as the research of investors' mind and behaviour, this paper has great practical value.With various research methods, we empirically explored the market reactions to Chinese enterprises'serial M&As. We found that (1) there are some regularities with listed enterprises' serial M&As; (2) market would be influenced by several psychological bias, and have study beavers; (3) market reaction to listed companies'serial M&As has long-term feature.