An Empirical Study On M &A Performance Of China's Listed Companies

Along with the step of economy integration, corporation merger and acquisition have speeded up the capital accumulation in the world, and in China Corporation M&A have progressed in a rapid rate from 1997, which exceeds the IPO to be the largest part of resource configuration in the security business. Because of the importance, the performance of M&A should be known clearly, it is good to making the correct decision, legislating and Managing. This paper uses the event study framework to test the event of M&A of listed companies in China during 1999 to 2003 and makes an empirical study. The result shows that the acquiring company can be significantly brought the cumulating abnormal rate (CAR) of 3.98% in the event window; but the target company can't be significantly brought the CAR which declines to the -1.11% in the tenth day. Because the M&A has not been marketable, the most cases are controlled by the government, so the acquiring company doesn't have the rivals and has the low cost, but the target company can't increase its price and can't have a good performance. According to the type of M&A, Industry, largest ratio of shareholder, the paper analyses the performance of the acquiring company and target company, and it indicates that share acquiring can be brought the most significant CAR than the assets acquiring and complete acquiring and the CAR of the share transfer and assets transfer of target company declined rapidly after the announcement of M&A which accords with the result of all the target company. In the different Industries, the commercial Industry of acquiring company and target company has got the significant CAR. In the different largest ratio of shareholders, CAR of the national and institutional shareholder are far more than the A shareholder. Finally, the findings show that the market environment should be founded, the competition should be strengthen in the acquiring company, the government control should be reduced, the management should be enhanced and the bad motive M&A should be controlled.