Empirical Study On Performance Of Foreign M&A Of China's Listed Companies

With the development of the world's economy integrative, China is stepping into the world's economy and loosening policies on foreign M&A, there are more and more foreign M&A and this phenomenon has become one hot issue of China's security market. But, whether the foreign M&A really improve the performances of target listed companies is still worth to research. For this purpose, this paper makes the empirical study on performance of foreign M&A of China's listed companies. Based on the theory of M&A and performance with the foreign M&A which happened in our country, this paper analyzes the motivations, industries, characteristics and the mode of the M&A.At present, the target corporations are always the manufacturing ones, and always be the large ones. At the same time, using the data of foreign M&A of China's Listed Companies during 1999-2006, this paper employs the principal component analysis of factor analysis then gets the component scores, and makes the empirical study on the performance of foreign M&A of China's listed companies. The result shows that in a whole, the performance of the first year after the M&A become worse than the previous year,while the performance of the second year has grown better than the previous year. Moreover,this paper shows the different motivations resulting different performance. The smaller shares the foreign has, the worse it is; the shorter it has the shares, the worse it is and if the foreign does not participate in the directorate, the performance will be bad.Finally,based on the analysis of empirical study,this paper puts forward a series of measures and suggestions such as enhancing the government's efficiency, the legal systems of China corporate M&A and because of the different motivations resulting different performance so we should encourage the stratagem ones to enhance the competition and how to deal with the foreign M&A for the listed companies and improving the capital market .