The Financial Effects Of Mergers And Acquisitions By Listed Companies In China

Whether mergers and acquisition can bring wealth effect for listed companies, the existing empirical studies are inconsistent at home and abroad. The empirical studies on China's listed companies' mergers and acquisitions generally use a single method, lacked of the combined evaluation from a long-term and short-term point of view. This paper selects China's listed companies which had M&A case in 2007 as samples. By examining the listed company's secondary market performance before and after acquisition through the event study methods, we reach a short-term result of total acquisitions. By comparing composite scores' change of listed companies during the four years before and after mergers and acquisitions through the financial indicators system, we reach a long-term result of total acquisitions. On combining the research results under the event study methods and financial indicators methods, this paper found that the overall effect of China's listed companies' mergers and acquisitions in 2007 is not satisfactory, and lacked of sustainability. At last, this paper analyzes the reasons of the unsatisfactory result in China's listed companies' mergers and acquisitions, and puts forward suggestions for improving the performance of China's listed companies in macro and micro levels. Hope this paper will give some references for the researches on China's listed companies' mergers and acquisitions.