A Performance Study On Foreign-capital M&a Of Our Listed Companies

Promoted by the economic system reformation and constantly opening to the outside world of our country, China with huge domestic market and inviting development potentiality becomes the focus that transnational enterprises fight for gradually. The mergers and acquisition of listed corporation by foreign capital developed rapidly which brought important influence to our country's economy. But after transnational mergers and acquisitions, will the company's assets be used to improve efficiency? Will the value of the company increase? Was M&A successful? So it is imperative under the situation to take up the task.This paper does the research on the foreign capitals acquiring listed company of our country. At first through looking back the relevant theories about the reason for the foreign capitals acquisition. On the basis of recommending the course of foreign capitals acquiring listed company of our country. We found the current situation and basic characteristic in the foreign capitals acquiring listed company of our country at present. I selected 16 listed corporations as samples to study the economic performances which take place M&A by foreign capital in 2002,2003. In this paper, in order to study the economic performance after an acquisition the chief method is economic value added (EVA). The EVA is equal to net operating profit after tax minus cost of capital, after the deduction of all costs was a residual income which reflects the value of the listed companies. EVA can reflect the fact whether mergers and acquisitions benefit shareholders, whether M&A increase the value of company, and if the M&A is succeed or not?According to the research, we discovered that after an acquisition, only a few companies create value for their shareholders; in the event of M&A,most of the companies'EVA appeared to be insatiable. Form that time, even some companies' EVA become negative from positive. It can be said that this is a failure M&A. Therefore companies should seriously consider a favorable strategic plan instead of a blind one before mergers and acquisitions.