A Research On Foreign M&A Performance Of Listed Companies In China's Food & Beverage Industry

In recent years, under the influence of economic globalization, M&A investment accounts for an increasing proportion of China's total utilization of FDI, with the improvement of the domestic economic environment and the legal policy environment. But, whether the foreign M&A really improve the performances of China's listed companies is still worth to research. Based on China's Food & Beverage industry, this paper studies in depth the performance of listed company before and after the foreign M&A , analyses important factors influencing M&A performance and then proposes appropriate countermeasures, which can our country's listed companies to improve the quality and level of foreign investment in future.Based on the theory of foreign M&A motives and management of risk on foreign M&A, this paper analyses the development overview of foreign M&A in China's Food & Beverage industry and the motives of the two sides in M&A. In empirical research part, using the sample data of typical listed companies in Food & Beverage industry which is acquired from 1998 to 2007, this paper employs the principal component analysis of factor analysis then gets the performance component scores before and after the foreign M&A. The result shows that in a whole, on average, the M&A performance of listed company in China's Food & Beverage industry didn't receive an expected increase. Furthermore, this paper uses Case Analysis Method to analysis the main factors affecting the M&A performance combined with typical cases, Then propose that motives of the two sides in M&A, China's foreign investment policy and the integration after M&A can affect the performance in the different stages of M&A activity. Finally we put forward some corresponding countermeasures to listed companies and government for reference. According to the empirical research, the mainly conclusions as follows: Only a few sample companies'short-term and long-term M&A performance are enhanced; Both of market-seeking motives or scale-seeking motives of foreign side and"market for technology"motives or"controlling for funds"of domestic company can lead to continuous decline in performance after M&A; part of China's foreign investment policy have a negative impact on the M&A performance. Effective integration between foreign side and domestic company can improve the long-time M&A performance.