An Empirical Study On The M&A Performance Of Listed Companies In China

Nowadays, a large amount of domestic and international M&A happened constantly. It had undoubtedly expanded the scale of enterprises at a fast speed. But whether had it increased incomes for the shareholders, created benefit for enterprises and brought value to the society?Over the past 30 years, western scholars had carried on lots of academic researches in the value effect of M&A, but great uncertainty exists in general. Since our country is still in economic transition period, the development of M&A market seems extremely important. We need to strengthen the study on takeover. Therefore study on whether M&A creates value or not is the most important thing.On the basis of early empirical study results of the M&A performance both at home and abroad, we studied the market reaction and merger performances of 303 samples that merged from 2000 to 2002 by event-study methodology and factor-analysis methodology. The results show: the stock market of our country had reacted to the M&A information, that is to say the M&A events have information content; and takeover created value for investors. The target firms could gain more abnormal returns and better performance than acquiring firms obviously; in all kind ways of merging, the performance of buying stock is best; the reaction of our country's stock market to M&A is becoming rational, and the performance of listed company after merger has improved year by year. It proved M&A market in our country is growing up progressively; the results of event study and factor analysis are about the same. It proved that the takeover market had made relatively rational reaction to M&A according to overall management state of company to a certain extent.The innovations of this paper lie in: (l)we analyzed both market reaction and M&A performance by even-study and factor-analysis; (2)we studied the influences on performance of the acquiring firms, and that of the target firms; (3)we compared the different market reaction and performance of target firms among different merging ways and in different years; and (4)while studying the performance before and after merger, we collected a large number of financial data and used the scientific statisticapproach-the factor-analysis methodology which strengthens the credibility of theresult.