A Comparative Study On Performances Among Listed Companies' M&A By Three Types Of Enterprises

There has been increasingly more and more M&As against Chinese listed enterprises since 1990s. With the smoothing going of the share holder structure reform which started in 2005, the full circulation era is right in the corner. Benefited from this, there will be more M&As in China with greater significance. The academic circle has been focused on this topic for quite a long time, and one important aspect in their research is performance of the M&As. Most previous researches focus on performance improvement after M&A, some of them compared M&A performance of different M&A modes, vertically, horizontal or both. But very few focused on the comparison of M&A performance between enterprises with different ownership type. This essay made an innovation, basing on the unique Chinese economic mechanism and current academic development on M&As. In this article, acquirers are divided into three kinds, state owned enterprises, private enterprises and foreign enterprises, and the author selected typical cases in Chinese equity market in 2005 as research samples for his research. This essay mainly used Accounting-study Methodology, Principal Component Analysis and Wilconxon test to research M&A performances of three acquisitions mentioned above.According to the demonstration, performance of state owned enterprises and private enterprises are almost the same, business operation was obviously improved in the year of M&A and the next, but not statistically significant. But since the second year both of the two kinds of acquirers saw business performance decline. It is also not statistically significant, and business performance also excelled the year before M&A. This means acquisition could improve business performance of the listed enterprises in the short run, but not long-lasting. On top that, it also suggested that acquisitions launched by state owned enterprises is not necessarily better than private enterprises. For foreign enterprises, business operation of the acquired enterprises would decline in the year of M&A and the next compared with the year before. It would rebound in the second year but still inferior to the year before M&A. Although performance improvement by foreign enterprises was also not statistically significant, financial index changes showed that this essay outlined M&A performance improvement of the three acquisitions mentioned above. Besides, this also showed that acquisition performance by foreign enterprises was also not ideal, to some extent, even worse than that of state owned enterprises and private enterprises.Based on conclusions of the test, the author analyzed reasons and put forward his own suggestions, for the sake of healthy development of Chinese equity market and M&A against Chinese listed enterprises.