Listed Companies In China M & A Performance Empirical Analysis

Whether M&A can effectively improve the performance of listed companies has long been the focus both in foreign and domestic academia. Nowadays, there are a lot of theoretical and empirical studies on M&A performance. However, M&A performance is uncertainty because of different methods and different sample selections. Some scholars got the result of effective performance, the others got opposite conclusions. As the reform of separated stock right, the consummation of related M&A laws and regulations and the need for development of Chinese listed companies, M&A of listed companies in China market will be more and more prosperity. In this context, it is important for us to study M&A performance for listed companies in China. Compared with the financial data before M&A and after M&A, we can evaluate M&A performance in listed companies objectively and develop realistic M&A strategies for listed companies in China.Based on the review of research methods and empirical theories of foreign and domestic studies in M&A performance, this article utilize financial indicators and factor analysis methodology to form a comprehensive evaluation model for M&A performance. The empirical study analyzes 93 sample listed companies that occurred in 2005 and then studies the changes of operation performance before and after M&A. Then the multiple regression model was used to analyze the related factors including the characteristic of acquisition accompany, the type of M&A, the position of target company in the industry, the source of the target company and the shares from target company in this transaction. This article analyzes these 5 factors which influence the M&A performance.Generally, the results shows that the listed companies have not improved the performance in the year of M&A, and have a good trend to improve the performance in the two years after M&A. In the study period, there are no obvious improvement in gross margin and profit rate from operation. We need further research to prove the positive performance of M&A. In the short term, the return on assert and the return on equity are increasing in the two years after M&A. It shows good business after M&A. It is obvious that private enterprises' performance is higher than the state owned companies. Different types of M&A result in different M&A performances. Conglomerate M&A's performance is not so good as horizontal M&A and vertical M&A. In the end, in the face of the government intervention and non-rational mergers and acquisitions in the M&A and the current economic policies in China, this article give several policy suggestions including reducing the involvement of government in the M&A and choosing reasonable M&A strategy to improve the M&A performance in the listed companies.