An Empirical Analysis On Synergy Of Listed Company Mergers And Acquisitions In China

Synergy is one of the famous theory that financial economists explain corporation M&A (mergers and acquisitions) from the seventies of the 20 th century. With the development and perfect of security market in China, many listed companies and the government regard M&A as a method which improves operating and turns loss into gain to actively put it into effect. It is vital to research in synergy of listed companies M&A which has theoretical and practical meaning to contribute to the reform of state-owned enterprise, to optimize the collocation of resources, to activate stock assets and to realize the added value of a company.This paper entirely investigates synergy of listed company M&A in China for the first time; using panel data, various statistically analytical method and overall evaluation method based on financial index. This study is based on a sample of listed company M&A occurring in China over the period 1999-2002. The result shows that, in general, synergy of company M&A is positive in a short time but negative in the long run. We think that most of M&A are strategic.This is different from those ideas that most of M&A are the market propagandizing and have no substantive significance. Purchasing stock right, related transaction and legal person share being the first largest stockholder have a positive effect on synergy. Horizontal mergers, mixed mergers, the first largest stockholder being changed after M&A, the acquiring firm being the first largest stockholder of the target firm, or can control or have great influence on the target firm directly or indirectly, floating stock or state-owned stock being the first largest stockholder have a negative effect on synergy. M&A don't promote the performance of the target firm and the acquisition firm.This thesis is composed of five chapters. The first chapter summarizes documents to understand research contribution and deficiencies at home and abroad. Using the achievements in research of predecessors for conference, we find out the breakthroughpoint of this study. The second chapter defines synergy of listed company M&A. To guarantee the objectivity and systematicness of this study, we point out people's misunderstanding of the concept of synergy, define the concept of synergy in corporation M&A to lay the theoretical foundations of the followings. The third chapter discusses reaearch method and sample selection. First, we review methods of calculating synergy at home and abroad. Then, we analyse their feasibility combining status quo of corporation M&A and security market in China. After that, we put forward study method of this paper combining corporation M&A and security market in China. Last, we expatiate the standard and cause of sample selection and source of data. The fourth chapter is the focus point of this paper. It is composed of three sections. The first section analyses synergy in the year and years after M&A. First, we calculate synergy in the year and years after M&A. Then, we analyse some factors' impact on synergy in corporation M&A from six facets. The second section designs model of calculating synergy in corporation M&A combining status quo of corporation M&A in China, analyses the parameter estimation of this model. The third section analyses respectively the impact of M&A on the performance of the acquisition firm and the target firm in the year and years after M&A. The fifth chapter comes to the conclusion, concluding the conclusion of this paper.