| Mergers and acquisitions(M&A)in China began in the 90 s of last century.M&A is one of the most important ways for enterprises to integrate,upgrade and achieve strategic goals.In recent years,the market of mergers and acquisitions of Chinese listed companies has been continuously active.With the completion date being the benchmark,61,85,134,246,437 and 365 transactions occurred in the years 2011-2016 and the number in 2014 is especially high.Accompanied,the phenomenon of "high premium and high performance commitment" in China's M&A and restructuring market(that is,the "double high phenomenon")is becoming more and more intense.In recent years,the value added value of the assets of the A-share listed companies is increasing year by year.The average premium rates of M & A from 2011 to 2016 were 81%,201%,518%,525%,743% and 991%,respectively.Among them,the proportion of highly valued companies also showed an upward trend.In 2015 and 2016,the proportion of M & A underlying assets whose valuation appreciation rate are more than 1,000%valued accounted for nearly a quarter.Among them,the typological characteristics of overvalued value are more obvious.The valuation of related transactions,cross-border M&A,and transaction paid by means of shares are significantly higher than those of other types.In each transaction,the price variable is always the core element to evaluate its fairness.On the other hand,in order to protect the interests of the mergers and acquisitions,and to enable the mergers and acquisitions to obtain the consent of securities regulators and investors,the high premium rate of M&A is often accompanied by high performance commitments.In the practice of China's securities market,M&A and reorganization activities are often regarded as a rare hot topic,which makes the stock of listed companies speculated in the secondary market.The emergence of "double high" phenomenon,on the one hand,has increased the impact of restructuring M&A activities on listed companies.On the other hand,because of the emergence of high line commitment,the market has raised the expectation of future performance of listed companies,and once the commitment performance is not up to the standard,the resulting performance expectations fall and it will influence listed companies' operation.The purchase of goodwill impairment will bring great adverse effects to the listed companies.In fact,different ownership structure determines different corporate governance structure,and ultimately determines the behavior and performance of enterprises.However,under the background of high ownership concentration of Listed Companies in China,we can not ignore the important role of ownership structure in the decision-making of mergers and acquisitions.In recent years,China's securities regulators have been concerned about the adverse effects of the "double-high" phenomenon on the securities market.However,in the academic research field,there are few literatures on the behavior and effect of M&A reorganization based on private benefits of control right from the perspective of "double high" phenomenon.In this context,this paper combs the domestic and foreign literatures about M&A motive,M&A performance,M&A pricing,related purchase,large shareholder agency and so on.Based on information asymmetry and principal-agent theory,this paper systematically analyzes how the controlling shareholders obtain the private benefits of control rights through M&A of listed companies in China.Taking the phenomenon of "double high" emerging in the market of purchase and reorganization as the breakthrough point,this paper focuses on the influence of controlling shareholders' characteristics on the major assets reorganization behavior of listed companies,including the influence on the decision-making and the premium of listed companies' M&A,and verifies that controlling shareholders obtain the private benefits of control rights through M&A.Under the institutional background,this paper further studies the influence of controlling shareholders on the effect of M&A,that is,the influence of controlling shareholders on the performance changes after M&A and the performance commitment to meet the standards.By analyzing the mechanism and influence path of controlling shareholders on the performance of M&A reorganization,it further explains what controlling shareholders consider more in M&A.It is not through mergers and acquisitions to improve the performance of listed companies,but through mergers and acquisitions to obtain private benefits of control.Based on the phenomenon of "double high" in M&A of China's capital market,this paper follows the research thread of "motivationbehavior-consequence",puts forward problems,analyzes the current situation and causes,and puts forward countermeasures and suggestions.Specifically,this article is mainly based on the following logic and Thinking:Firstly,based on the background of major asset reorganization in the capital market,this paper combs and summarizes the related literatures of M&A theory and controlling shareholder agency theory at home and abroad.Based on information asymmetry and principal-agent theory,this paper analyzes how controlling shareholders obtain private benefits of control rights through M&A.The paper puts forward the influence mechanism of the specific characteristics of mergers and acquisitions,such as related mergers and acquisitions,share payment mergers and acquisitions,conceptual mergers and acquisitions,on controlling shareholders' acquisition of private benefits of control rights,and clarifies the theoretical mechanism of this paper and the motivation behind the phenomenon of "double high" in mergers and acquisitionsSecondly,taking the phenomenon of "double high" in M&A of Listed Companies in China as the breakthrough point,this paper studies the status quo of high valuation and high performance commitment of major asset reorganization of Listed Companies in China,and describes in detail the M&A of Listed Companies in different market segments,transaction nature,payment methods,mergers and acquisitions industries,evaluation methods,reorganization objectives.On this basis,the paper analyzes the market reaction,the performance commitment of the underlying assets,the change of performance commitment and the termination of the transaction of material assets reorganization.The results which reflects the characterstics of "double high" phenomenon of M&A shows consistent with the mechanism of controlling stocks' acquisition of private benefits of control rights by means of related mergers and acquisitions,share payment mergers and acquisitions,and conceptual mergers and acquisitions,and determine the relevant control variables for the following empirical tests.Thirdly,this paper studies the influence of controlling shareholders on mergers and acquisitions of listed companies.In this part,firstly,we study the influence of the controlling shareholder's main equity characteristics,such as shareholding ratio,ownership nature,ownership balance and separation of two rights on the restructuring decision of listed companies,and explore whether the controlling shareholder are related with the behavior of mergers and acquisitions(M&A frequency)and whether there are related mergers and acquisitions,share payment mergers and acquisitions,and conceptual mergers and acquisitions.On this basis,the paper further discusses the influence of controlling shareholders on the pricing of M&A reorganization,studies whether the agency problem of controlling shareholders affects the valuation of the underlying assets,and whether the controlling shareholders are more prone to agency problems in the aspects of related M&A,share payment M&A and conceptual M&A,so as to obtain the private benefits of control rights.Forthly,on the basis of the study of controlling shareholders' decision-making on mergers and acquisitions of listed companies and the premium of mergers and acquisitions,this paper studies the influence of controlling shareholders on the effect of mergers and acquisitions of listed companies.In this part,firstly,we study the influence of controlling shareholder's main equity characteristics,such as shareholding ratio,equity nature,equity balance and separation of two rights on the overall operating performance of listed companies after merger and reorganization,and explore whether merger and reorganization can play a positive role in increasing the performance of listed companies,espcially whether merger,share payment merger and acquisition,conceptual merger and acquisition can improve the performance of listed companies.Then,this paper further studies the influence of controlling shareholders on the realization of underlying assets' performance commitment under the "double high" phenomenon in M&A of listed companies.By analyzing the mechanism and path of the controlling shareholders' influence on the performance of M&A,it is further proved that the controlling shareholders are not considering how to improve the performance of listed companies through M&A and reorganization,but how to obtain the private benefits of control rights through M&A and reorganization.Finally,based on the above research,this paper draws the main conclusions,and on this basis puts forward the corresponding policy recommendations.Based on the above research framework,this paper examines the influence of controlling shareholder's agency problem on the merger and reorganization behavior and the merger and reorganization effect of listed companies with normative theoretical analysis and empirical test.(1)Controlling shareholders can acquire private benefits of control through mergers and acquisitions.Major asset reorganization is an important subject of stock price speculation in the capital market.Suspension and resumption of stock trading has a great impact on the stock price of listed companies.Controlling shareholders can obtain private benefits of control rights by raising the market value of circulating stocks or facilitating the pledge of shares through the market effect brought by mergers and acquisitions.When the controlling shareholder carries on the related party merger and acquisition,buys the assets from the listed company low price or sells the assets to the listed company high price,may obtain the income which the more control right brings;When useing the share payment transaction consideration,the share payment way can be advantageous to realize the merger and acquisition both sides benefit to achieve the transaction,and then the controlling shareholders have more motivation to achieve high valuation M&A by means of share payment and gaining more private benefits of control rights;when the target of M&A belongs to emerging industries,the probability of conceptual M&A premium is higher;some controlling shareholders of M&A companies have more motivation to stimulate secondary market valuation through conceptual M&A,thus realizing the market value effect brought about by M&A,and so on.Get more control over private benefits.(2)The phenomenon of "double high" is prominent in related mergers and acquisitions,share payment mergers and acquisitions,and conceptual mergers and acquisitions.From year 2010 to 2016,the number of major assets reorganization transactions,transaction amount and valuation premium of listed companies are increasing year by year.The performance commitment of the target assets is getting higher and higher,the number of performance of the target assets which is not up to the standard is increasing.Under various circumstances,the phenomenon of high valuation and high performance commitment in M&A is becoming more and more serious.The acquisition of private benefits by controlling shareholders through mergers and acquisitions has provided a breeding environment.Moreover,the capital market reacts strongly to the announcement of the major assets reorganization plan.It is obvious that the listed companies use the concept of reorganization to speculate on the stock price.Especially,the reorganization of the high-value-added targets has a greater impact on the stock price of the listed companies.The "double-high" merger and reorganization can bring added value for the controlling shareholder's shares and become an important tool for the controlling shareholder to gain private benefits.Many characteristics of listed companies under the "double high" phenomenon are consistent with the mechnism brought up in this paper that controlling shareholders obtain private benefits of control through related mergers and acquisitions,share payment mergers and acquisitions,conceptual mergers and acquisitions.(3)The different characteristics of controlling shareholders affect the decision of merger and reorganization.(1)The higher the proportion of controlling shareholders,the more likely the listed companies are to have related mergers and acquisitions reorganization;the controlling shareholders which are private enterprises,are more inclined to carry out related mergers and acquisitions;the higher the degree of equity checks and balances,the higher the degree of separation of the two rights,the greater the possibility of related mergers and acquisitions.Shareholders may acquire private benefits of control through related mergers and acquisitions.(2)The higher the proportion of controlling shareholders is,the more likely the listed companies are to purchase assets by means of share payment in M&A;the more private enterprises are the nature of controlling shareholders,the more likely they are to use share payment;the higher the degree of equity checks and balances,the less likely they are to use share payment in M&A and reorganization;the higher the degree of separation of the two rights,the more likely they are to use share payment in In the purchase and reorganization,the more inclined to use the share payment method.(3)The higher the proportion of controlling shareholders,the more likely the listed companies are to engage in conceptual M&A;the more easily the controlling shareholders are private enterprises,the more likely they are to engage in conceptual M&A reorganization;the higher the degree of equity checks and balances,the less likely they are to use share payment in M&A;the higher the degree of separation of two rights,the more likely they are to engage in tend to carry out conceptual mergers and acquisitions.(4)Controlling shareholders' different characteristics affect the valuation premium of mergers and acquisitions.(1)Similar to the effect of controlling shareholder's shareholding ratio on the decision-making behavior of M&A,when the counterparty of M&A reorganization transaction is the related party,controlling shareholders are more inclined to buy the high value of the underlying assets,and obtain the direct control right income.The results show that the higher the proportion of controlling shareholders,the higher the transaction price of related mergers and acquisitions of listed companies;when the nature of controlling shareholders is private enterprises,the value-added rate of evaluation is higher,indicating that the controlling shareholders of private enterprises are more likely to tunnel the listed companies through the acquisition premium;the higher the degree of equity checks and balances,the higher the evaluation.When the value-added rate is lower,it shows that equity checks and balances can restrain the controlling shareholders from transferring the interests of listed companies through M&A premium;the higher the separation of the two rights,the higher the value-added rate is,and the pyramid multi-level equity structure will lead to the tunneling behavior of the controlling shareholders.(2)Similar to related-party mergers and acquisitions,the way of consideration for share payment of listed companies will strengthen the positive relationship between the controlling shareholder's agency problem and the premium rate of mergers and acquisitions,that is,the higher the holding ratio of the controlling shareholders is,the higher the transaction price of mergers and acquisitions and reorganization of listed companies with the way of consideration for share payment is.The controlling shareholders have the motive to use the share payment method to realize the interests of both sides of the merger and acquisition,conclude the transaction,and obtain the private benefits of control rights.(3)Similar to related party mergers and acquisitions,the conceptual mergers and acquisitions of listed companies will strengthen the positive relationship between controlling shareholders' agency problem and the premium rate of mergers and acquisitions,that is,the higher the holding ratio of controlling shareholders,the higher the transaction price of conceptual mergers and acquisitions of listed companies.Cross-border mergers and acquisitions,aiming at business transformation or business diversification,are often targeted at growing enterprises,so the higher the proportion of controlling shareholders,the more motivation to promote conceptual mergers and acquisitions,through the merger and acquisition market effect to obtain more market value gains.(5)The different characteristics of controlling shareholders affect the performance of listed companies after merger and reorganization and the performance commitment of the target company.Specifically,the higher the proportion of controlling shareholders,the more obvious the decline trend of performance after merger and acquisition,and the lower the achievement ratio of performance commitment after merger and acquisition;the more obvious the decline trend of performance after merger and acquisition,the lower the achievement ratio of performance commitment;the stronger the degree of equity checks and balances,the more obvious the decline trend of performance after merger and acquisition,and the lower the performance commitment.The higher the present ratio is,the higher the degree of separation of the two rights,the more obvious the downward trend of performance after M&A,and the lower the achievement ratio of performance commitment is.Moreover,related mergers and acquisitions,share payment mergers and acquisitions and conceptual mergers and acquisitions will strengthen the negative relationship between controlling shareholders' agency problems and listed companies' performance after mergers and acquisitions as well as the target assets' performance.Based on the existing research literature,this paper makes a thorough and systematic analysis of the influence of controlling shareholders on the merger and reorganization behavior and the effect of merger and reorganization of listed companies.(1)Innovation of Research PerspectivePrevious studies mainly based on transaction cost theory and synergy effect theory to explore the synergy effect of M&A and restructuring,such as reducing transaction cost,reducing the cost of asset specificity and environmental uncertainty.Based on the agency problem between large shareholders and small and medium shareholders,this paper studies the influence of controlling shareholders on the merger and reorganization of listed companies.At the same time,this paper closely combines the hot issues of M&A in the capital market,and takes the phenomena of "high valuation and high performance commitment" as the breakthrough point,which has a strong timeliness.(2)Innovation of Research TheoryPrevious studies on private benefits of control have mainly focused on the direct and explicit means and approaches that large shareholders may use to purchase and sell products,such as internal related transactions,capital occupation,cash dividends,etc.However,with the development of capital market,the way of benefit transmission is more hidden and difficult to find.Although some studies point out that related party mergers and acquisitions may encroach on interests,they have not fully expounded the mechanism of interest encroachment.From the perspective of controlling shareholder's agency theory,this paper puts forward that M&A is a stable means of profit transmission,especially the prominent phenomenon of "high valuation and high performance commitment" in M&A of listed companies provides the environment and operational tools for controlling shareholders to use M&A and reorganization to obtain private benefits of control rights.On this basis,this paper systematically puts forward the mechanism of how the controlling shareholders can obtain the private benefits of control rights through related mergers and acquisitions,share payment mergers and acquisitions,conceptual mergers and acquisitions,which enriches the theory of controlling shareholders seizing the private benefits of control rights.(3)Innovation of Research ContentsThis paper tales the "double high" phenomenon as the experimental environment to explore how the controlling shareholders in the merger and reorganization of gain private benefits of control rights.From the decision-making of merger and acquisition to the effect,from the current period of the event to the aftermath of the event,the paper analyzes the influence of the main characteristics of controlling shareholders on the decision-making,pricing and performance commitment of mergers and acquisitions,such as related mergers and acquisitions,share payment mergers and acquisitions,conceptual mergers and acquisitions,and clarifies the motives and consequences of the related mergers and acquisitions,share payment mergers and acquisitions,conceptual mergers and acquisitions,which help investors to have a more systematic and complete understanding of the causes and consequences of controlling shareholders' dominant role on mergers and acquisitions,provide a useful perspective for the capital market to understand the decision-making of mergers and acquisitions of listed companies,provide a basis for the investment decision-making of minority shareholders,and provide basis for decision-making for the regulatory authorities to enact legal system.At the same time,this paper extracts "conceptual M&A" from a large number of M&A phenomena characteristics and take it as a close combination with "double high" phenomena and a certain causal relationship of M&A characteristics factors into the research framework.It is more conducive to helping investors understand M&A and reorganization behavior,and enrich the M&A related research. |
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