A Motivatied-Based Study On Performance Of M&A About Listed Company

The strategy of modern enterprises makes a reservation and bases on the long-term development of enterprises, enterprises, while developing, will take place a series of annexation and purchase inevitably. With China's entering WTO and the development of economic reform, many enterprises have faced merger and acquisition (M&A), which will change the industry structure and affect the whole market economy and stock market in China. The main purpose of this paper is to establish the performance of listed companies M&A evaluation system, taking the M&A in 2003 as an sample to find out whether M&A performances of different motivations are same on the basis of theoretical analysis. And then we analyze the existing problems of listed companies M&A, and provide a basis for improving the performance of listed companies M&A. First of all, we classify the sample by motivations, and use financial factors and non-financial factors to value the performance, and then the performances of M&A of Chinese Listed Companies of 2003 are analyzed by using a score function with the Factor Analysis method from Statistical Analysis. Meanwhile, we use non-parameter test to analysis the financial characters of different M&A to find out which factor affect the M&A performance and test the higher management pay to analysis the influence of non-profitable factor.It is concluded that the overall performance after M&A is not better than that before M&A, but M&A based on different motivations have different results: the performances of expansion and multiplex M&A are much better than others. The expansion M&A is successful on the view of expanding the main business revenue; the performance of diversification M&A improve sharply in 2006, the integration of diversification M&A is successful because this M&A often occur during transition and the integration must last a long time; the performance of scale-M&A drop largely because of related transactions; industry-M&A is not successful and maybe it always happens when the industry is prosperous and the pay is high. The higher management pay is not high compared to the market level, we can know participants are more rational, and the motivation of non-profitable factor is not obvious. At last, to solve the problems of government-intervention and intermediary-distemperedness, the author gives some suggestions for improving the acquisition performance of Chinese listed companies.