China's Listed Company Merger And The Value Of Recycling Effect Analysis

Mergers and acquisitions is an eternal hot spot in the stock market, which played an important role in the course of business. Listed companies were originally conceived to achieve business development goals to create value for the enterprise through mergers and acquisitions. In reality, many companies do not achieve the desired goal after mergers and acquisitions.In this paper, we study the short-term performance of M&A through event study. We discuss the short-term performance of M&A from three ways:mergers enterprise and objectives enterprise as a whole, asset acquisitions and stock acquisitions, stock markets rise and decline. We research the long-term performance of mergers and acquisitions through economic value added (EVA). First, we estimate the companies'expected EVA through panel data model, and then we use the result of the actual EVA subtracting expected EVA to evaluate the long-term performance of mergers and acquisitions.After empirical analysis, we found that:the Chinese company's short-term performance of mergers and acquisitions in recent years is different from most of the research findings. After mergers, the shares excess returns of mergers companies have not changed significantly, while the target companies'stock excess returns have dropped significantly. Therefore, the values of target companies are lose in M&A. And we also found that:in the stock market, the M & A's performance of bull is better than bear,asset acquisition'performance is better than stock acquisition'performance.In the study of long-term performance, we found that target companies had down trend before mergers and acquisitions. The value of target companies'EVA has declined markedly. Enterprises affected by the economic environment. If the economic situation is good, enterprises'EVA value will be higher. Mergers and acquisitions create value for the enterprise. M & A Enterprises got M & A revenue within two years. The target company did not show an obvious increase in the value,but the target company did not loss value.