Research On M&A Transactional Characters, Ownership Structure And Market Performance

Background of the emerging market during economical transitional period,the developed activity of M&A of listed companies in China is characterized by the structure of share-splitting. Due to the problem of the system,the profound analysis of the M&A of listed companies are scarce in the domestic academic community.The ethos of institutional change,however,admits of no avoidance.The Share-splitting Reform laid the foundation for the marketization of M&A and the dynamical wheels of M&A becomes increasingly powerful.In the Post Share-splitting Reform Era,whether can M&A create value for listed companies? What factors will affect the performance of acquiring firms? What are the inside reasons behind M&A? These important questions are worth researching at the present stage of the developing capital market in China.Using M&A cases of listed companies of stock markets from 2005 to 2007 as a sample, empirically examines the disparity of the market performance from the perspective of long-term and short-term,this article which is based on the system of the Chinese capital market in Era of the Post Share-splitting Reform builds the theory frame of ownership structure,the characters of M&A transaction and of the acquiring firms' performance,at the same time studies the direct influence of the ownership structure of the acquiring firms and the characters of M&A transaction on the market performance of acquiring firms,as well as the interactive effects.This study indicates that acquiring firms could obtain statistically significant positive accumulative abnormal return(CAR) on and near the acquiring announcement day,but no significant in the whole event period due to the poor persistence;and would suffer heavy loss in long-term.For the short-term perfoarmance of acquiring firms,paying in stocks and shares better than paying in cash;the nature of state-owned and the proportion of the first largest shareholder's share-holding of the acquiring firms have significant negative effect on the long-term performance in 1 year after mergers,while this effect becomes insignificant in longer period after mergers;and with an increase of the proportion of institutional shares,the short-term perfoarmance as well as the long-term performance increase.The state-owned acquirers paying in stocks and shares and buying assets could improve the short-term performance and the long-term performance,but put up a bad show in the long-term performance of the related acquisiton;non state-owned acquiers paying in stocks and shares and acquiering stock equity could only improve the short-term perfoarmance;under the condition of paying in stocks and shares,the more proportion of the first largest shareholder,the poorer short-term performance, on the contrary,the better long-term performance in the related acquisition;the more proportions of institutional shares in acquiering firms,the poorer long-term performance in the assets acquisition and the related acquisition.M&A of listed companies in China is being characterised more and more by the marketization.The Share-splitting Reform has certain positive significance to M&A of listed companies,however,it also brings a lot of negative influences on the related parties.Therefore, enacting and improving laws and regulations on M&A,strengthening information disclosure in M&A,establishing the different supervisory systems according to different types of share holder are important measures in promotion of the healthy development of the M&A in China.