The Performance Of M & A In Industrial Consolidation Perspective

Merger and acquisition is one of the most active issues in the world economy today, whose volume has reached $3.28 trillion through 37400 deals in 2008. The development of the M&A practice promote the study on M&A theory. Theory of Corporate Mergers and Acquisitions, is overall consists of the M&A motive theory and the M&A value creation theory. The research of M&A motive theory have been recognized by both academics and industries. As a mature theory, the M&A motive theory provide many practices a theoretical direction. But meanwhile, the study of M&A value creation theory does not reach such an agreement, especially the majority of the M&A deals have been proved fail by empirical study of M&A. As the number of global M&A deals boost these years, the low-rate of successful mergers arouses wide concern by western economists and Chinese scholars. Some scholars advance a Success Paradox on the corporate M&A. Why do firms continue pursuit the mergers while the findings of empirical research have been disappointing? What does this phenomenon imply? Is there anything wrong about the study of merger performance? In this dissertation, to find out the essence which behinds the mentioned phenomenon is attempted.After analyzing the outcomes and the conclusions of the past studies on corporate mergers and acquisitions, this study present the basic concept of corporate M&A research, including the merger performance and how to review the merger performance. It comes up with a point of view that the micro performance of corporate M&A should include the information of both the change of enterprise performance lead by M&A and the result of M&A activities itself. It also provides that the evidence of evaluating the success or failure of merger activities is not the change of enterprise financial performance but the M&A activities itself.Based on the Theory of Industrial Consolidation by A.T. Kearney in 2002, in this study, the distinguishing features and motivations of corporate M&A are analyzed systematically according to the different stages in the industrial consolidation process that including the initial stage, the scale stage, the gathering stage and balance and union stage. Meanwhile, a multiple motive system is constructed innovatively from the perspectives of Economy dimension, Strategy dimension and Management dimension. In this multiple motive system, a group of performance indicators are established. Based on the Balanced Scorecard theory, this study builds a performance evaluation system for M&A activities in essence. Together with the traditional corporate M&A performance evaluation system, this study presents a scientific M&A performance evaluation system which could provide a certain answer to Success Paradox.In addition, this study selected a series of M&A activities in the past decade, and took Tsingtao Brewery Co Ltd for example, which did well in industry consolidation, and made an empirical analysis on their 53 merger activities during 1997-2007 based on the view of the Theory of Industrial Consolidation. The analysis results indicate that the evaluation system of corporate M&A performance which was established based on the theory of industrial consolidation in this dissertation is a useful and supplementary tool for the scientific and rational evaluation of corporate M&A performance.In a word, a new point of view to evaluate the corporate M&A performance is discussed in this study, and hopefully it could be beneficial to complement the theory of corporate M&A performance and M&A empirical analysis.