Analysis Of M&A Motives And Empirical Test Based On Managerial Motives

From the end of 19th century to the end of 20th, the western nations have experienced five M&A tides. Since more than centuries, the western nations have realized the industrial promotion and the resources optimized in this way. After entering to WTO, China's promise of opening makes the market competition more intense. In order to strive for the survival, more and more superiority enterprises have chosen the capital operation, the property reorganization, wanted to hold the opportunity and make a great leap. In next 5-10 years, there must be a peak period of M&A of China's enterprises.The success of M&A lies in 5 aspects, namely the motive, ideal target firms, advisable trade method, reasonable price and the conformity after M&A. May see the motive is the starting point and the standpoint of M&A, it will radically affect the occurrence and the success of M&A. This article will analyze the motive of M&A on the basis of history and practice. After comparing the foreign experience to civil practice, the author checks the effects of M&A on china's stock market, especially mergers triggered by managerial motiveThe first part is an introduction, explains the research background, the contents and the significance, then introduces the related concepts and the types in order to establish standard analysis foundation and frame;The second part reviews the overseas M&A tide and the motives it embodied, then makes a comprehensive review of the M&A theories.The third part takes the perspectives of welfare, the minimum of transaction cost and the diversification to study the horizontal, vertical and diversification mergers. It explains the M&A events by basic models and uses classic cases to analyze the inner motives.The final part of article introduces the history of China's M&A and corresponding characteristic motives. Then on the basis of theoretic review, the author picks 51 M&A samples from 2001 to 2004 to do an empirical analysis. The main method is event study, regression analysis and contrast of two groups on the basis of financial targets.The result demonstrates: M&A can bring wealth to the shareholders of acquiring firms, and the motive relate to agent has a notable effect on M&A performance. The hubris hypothesis and agency hypothesis are verified. And the effect of FCFH and the ratio of state-owned stock also make a good explanation. In our country vertical merger play a best performance because of industrial cooperation, but the asset peel-off is not approbated by investors.