Study On The Performance Of Conglomerate M&A Of Chinese Listed Companies

The performance on Merger & Acquisition (M&A) has always been a hot issue in the study of listed enterprise. Watching the successive waves of enterprise M&A, conglomerate M&A has been an important place since the second wave of M&A,and it has been a major form in the third wave of that. The Purpose to take the conglomerate M&A is to maintain diversified companies'business performance smoothly, and help companies resist some attack in the market.Judging from China's current situation of M&A, some enterprises can enhance the corporate's business performance by conglomerate M&A. But there are also many enterprises use that strategy blindly, making it difficult to enhance economies effect and business risks. So, what's the cause and effect of conglomerate M&A in China's list company? Have such companies got the excess increasing by M&A? This is the problem we must be answered when an enterprise take behavior of conglomerate M&A.This paper basis on analyzing and summarizing the status and problems of our diversified business conglomerate M&A. I choose 90 conglomerate M&A companies in 2004 and 2005 as samples, and conduct the empirical analysis in the stock market reaction of short-term and long-term performance after the conglomerate M&A, and test the sample date according to different industries and different nature. This paper use the stock price fluctuations research method, which is mature method in foreign market, to measured the entire stock market reaction of the conglomerate M&A events, and use BHAR research method to measure the stock market's long-term stock market reaction.After a detailed analysis and careful calculation, we could get the conclusion that conglomerate M&A could create business value. Conglomerate M&A be able to bring significant profits to shareholders in the near future, but the long term performance of stock market reaction is relatively limited. Compared the effect of different nature of mergers and acquisitions companies, state-owned companies could get better effect than private companies; There are significant reaction in the stock market after conglomerate M&A in the listed companies that in the different industries life cycle.