The Study Of M&A Payment-Method In Chinese Public Company

Mergers and acquisitions(M&A)are always remarkable capital transaction, the scholars of finance and accounting have done much research in this area. Previous study of domestic scholars predominantly focused on the performance of M&A, there are only a little research on the process of M&A. Payment in M&A is the last step of M&A, which is a key factor on the success of M&A, the results of empirical research also bear this point. This paper is a research on the payment-method of our country listed companies, the research content focuses on the choice of the payment method in M&A. This article is divided into two parts: theoretical research and applied research.In theoretical research, the results of relevant empirical study show that, there are two most basic factors affecting the choice of the payment method in M&A, which are asymmetric information and financial influence. Therefore, this paper firstly defines the concept of M&A according to research objective, and analyzes the various payment methods in M&A. Then, we make the economic analysis of how to choose the payment methods in M&A for the two parties of M&A, based on information economics theory, the conclusion is drawn: because of asymmetric information, there is the problem of adverse selection in every payment method for both parties, the completion of the transaction in the reality is the result of the elimination of information asymmetry to some extent. Meanwhile, if the target company accept the payment-in-stock, there will be a principal-agent relationship between the target company and the acquiring company, so the target company will bear the extra agency costs compared to the accept of the payment-in-cash. Finally, we analyze the financial factor impacting on the choice of the payment methods.In applied research, this paper analyzes two parts based on the conclusion of theoretical research, on the one hand, through statistical analysis of the data on the payment methods in CSMAR, we find the features of our country listed companies payment-method in M&A is: the payment method is too onefold, most is payment-in-cash, the ratio of payment-in-stock is too little, we also explain the reason of the features. On the other hand, we make a research on practice operation of the choice of the payment methods. First, we construct a decision model of the choice of the payment methods based on EPS. Then we analyze the key factor impacting on the successful implementation of every payment method. At the end of the article, we comprehensively analyze the payment method of the M&A case between SAIC MOTOR and Nanjing Automobile Croup.