Foreign Mergers And Acquisitions Of Listed Companies In China, The Performance And Impact

This paper is studing the foreign-capital M&A to the listed company in domestic china, which attempt to analyse its character,trend as well as the reason.Besides, It investigate the cases ranged fom 1999-2008 comes from Chinese securities market to verify the acquisition performance. From the view of reason, this paper emphasize the foreign-captital prefere to the company owned "core resource", and are very willing to pay for the high premium. Even more, both the foreign-capital, domestic listed company and the domestic government take part in the M&A.From the emprical stest, this paper collects the latest cases from 1999-2008, aim to verify the performance by M&A premium and financial results. As a result, all these cases present the positive performance: the abnormal return is significantly positive, which shows the investor is optimistic to the M&A case; based on financial resulsts, the direct M&A perform better than undirect M&A in the aspect of profitablity,operating capabilites and capital structure.To be important , the forein-captial M&A act as "two-edge sword". Because it has been bringing both postive and nagative effects on Chinese economy.On the positive view, it provides the capital resource, boost technological progress and industrial upgrading,improve the corporate governance structure, enable domestic enterprises to participate more effectively in the international division of labor and competition. On the negative view,it may impact Chinese economic security, it causes the domestic company to rely on the foreign technology on some level so as to impact domestic R & D and innovation capability. It may lead own brand under threat by "crowding-out effect".It may result in important sectors of foreign investment in the monopoly,threaten Chinese economic and industrial safety. As concluded, this paper recommend 5 suggestion:(1) Committed to Chain-oriented industry to promote the internationalization of Chinese enterprises;(2) Emphasis on the integration of foreign-capital M&A, improving the comprehensive competitiveness of listed companies;(3) Guide the acts of foreign-capital M&A to revent foreign shareholders against the state-owned shareholders even edium and small investors;(4)Improve Chinese legislative system of foreign-capital M&A to prevent Monopoly industry;(5) Strengthen the Information disclosure regulation to prevent stock market fluctuate by "black-box operation".