Study On The Motivation And Performance Of Vertical Mergers And Acquisitions For China's Listed Companies

As a way of corporate mergers and acquisitions,vertical mergers and acquisitions (M&A) have already attracted a lot of attention in Coase Times of 1937. a series of classic hypotheses, such as saving transaction costs, exclusive of assets and economy of scope, indicate the motivation of vertical mergers and acquisitions and also provide a powerful explanation of some oligopolies'vertical merger such as Ford, Standard Oil et.c, which still influence the global economy. But efficiency of vertical mergers and acquisitions has been the controversy focus of foreign scholars for many years.From the beginning in 1998, Vertical M&A of listed companies in China is constantly increasing. there are hundreds in 2005, and outstanding in the telecommunications, computer, automobile manufacturing, utilities, medicine, paper, petrochemical and many other industries. Vertical M&A of enterprises in China have become an important way of mergers and acquisitions, and attracted the attention of the relevant government departments. So,from this point of view, there are practical significance to study the causes and performance of vertical mergers and acquisitions.This paper analyzes the motivation and performance of the vertical merger use the methods of the combination of theoretical and empirical. Western scholars'theory and empirical methods of saving transaction costs, exclusive of assets and financial analysis methods and event-study methodology support to the study of Chinese enterprises'vertical M&A.Thinking china's economic environment,this paper think that: along with the deepening of China's M&A, Vertical M&A has gradually developed into an important acquisition type; on one hand, it is so mach industry production that make merger climax in these years,the other hand, China's capital market reform of the equity division and enterprise system integration provid conditions to Vertical M&A. The main purpose of vertical M&A of Chinese enterprises is to save transaction costs, stabilize resources and control sales channels.throuth empirical studying ,this paper think that: if we look from the angle of financial performance, vertical M&A is beneficial to the financial performance improvement to some extent. China's Market has a short-term positive leading and lagging reaction. However, in a long-term, it will not bring such a good return and market effect. So, on the one hand, the government should make or revised for proper supervision, on the other hand, create a good economic environment and policies to support this merger.