The Mergers & Acquisitions Choice Of Business Enterprise In Industry Life Cycle

With the increasing rapid economic globalization and integration, another financial crisis is taking its place. When faced with the challenge, how can we survive and deal with the financial crisis? It will bring about a practical meaning to us to identify the situation of economy and give a right direction for the enterprise's development if we do some studies on the intrinsic quality of M&A.Chinese enterprises are facing with a complex economic situation and also weak in the ability of competition. The development of economic integration makes us under curial pressures of international competition. There is an urgent need to improve our own competitiveness, restructure our industrial, a rational allocate of our resources, strengthen our enterprise management. M&A is looked as an optimal allocation of capital, which makes a reasonable integration of our enterprise resources. It will not only upgrade the industry's advantages, but also enhance its core competition. Recently, there is a growing number in M&A, but we can seldom see a successful one. Many of them are ended with failure. Why could not they realize their program? A large number of scholars both in China and aboard do a great deal of researches in it. Scholar's view.The subject of this paper is for the first stage of the strategic consideration, and the writer is also do some researches on how to make a reasonable choice in M & A. In this paper, the writer analysis the performance of M & A from3 different types ,and also divide enterprise's life span into 3 kinds of life-cycle.---the growth stage ,the maturity stage ,and the recession stage. Then the writer give a study on the different kinds of enterprise for each period based .on the industry life cycle theory: growing industry, mature industry and declining industry. And then make the empirical analysis to the performance of M&A. The conclusion is that different types of listed company have different performances. Horizontal merger and vertical merger perform better than conglomerate merger. In growing industry, horizontal merger gets the best. In mature industry, vertical merger perform better. In declining industry, horizontal merger is a good choice in the long term. The conclusions are basically backed up the hypothesis of `Industry Life Cycle and Merger Type'. The conclusions of this thesis can also do favor to the M&A decisions of listed companies in China.Finally the article carry on analysis the result of substantial evidence research of the problem , and put forward some suggestions .To the government it is time to norm our country market economy, sound law laws, and open a capital market appropriately, open widely a margin outlet for the business enterprise merger; in view of business enterprise angle they should consider merger item from top strategy, and also need to notice the macroscopic economic environment with the economic globalization and economic crisis at present, the environment of business enterprise has already expanded to global scope and the business enterprise makes use of merger this strategic tool to strengthen the core competencies of oneself in response to the future competition.