China Listed Lompanies M&A Activity And Performance Analysis

Merger and Acquisition is a kind of voluntary property transaction among enterprises, which needs to be paid. M&A gradually becomes an effective mode of operating capital to pursue the maximized value. With the development of economic globalization, M&A activities become more and more fiercely. Nowadays, many big enterprises grow stronger by the means of M&A activities. According to the statistics, the number of M&A activities in enterprises was 150 in 1997, but grew to 3998 in 2009. And the transaction amount also increased significantly. At the beginning, the transaction amount was less than a hundred million RMB,but the current amounts to thousands of billions RMB.M&A activities play a very important role in the development of Chinese enterprises. However, during the period, a lot of difficulties exit and its effect unsatisfactory. From this perspective, studying the performance of M&A activities has a significant meaning and hence it becomes the focus of this paper.The paper first makes an introduction to research background, significance, methods, contributions, and so on. In the second part we discuss the relevant concepts and classification of M&A, especially focusing on horizontal M&A,vertical M&A and mixed M&A. Several kinds of M&A ways in listed companies are also introduced in this part, because this paper mainly discusses the performances of M&A activities in listed companies. In the third section, we introduce the motive theory of M&A activities in foreign enterprises, and then discuss the motives of M&A in our country such as catering the government policies and realizing the interests of shareholders. At the end of this section is the literature review, which discusses five ways to value the performance of M&A activities. The fourth section is the retrospect of the M&A activity course in our enterprises. After the reform and opening, our enterprises have experienced four upsurges of M&A. This part makes a discussion of the causes and characteristics about the four upsurges in details.The fifth and sixth part is the key to this paper, which analyze empirically the operating performance and financial index of the listed companies during the adjacent years before and after the year when the M&A activities happened, by the means of factor analysis. The research objects are the M&A activities of listed companies in our country which happened in 2005.The results show that the horizontal kind is the best and the most stable, and the worst is the vertical kind. With respect to the performance of the mixed kind, we need a longer period to observe and find the answer. In the end, this paper attempts to put forward some effective countermeasures and suggestions to improve the M&A activities of listed companies.