Empirical Study On Chinese Listed Companies' Mergers And Acquisitions

In recent ten years, the development of listed companies have stimulated Chinese industrial structure adjustment and resources distribution optimizing, which set solid foundation for establishing modern enterprises system. However, there are still many problems during the development of Chinese stock markets. The profit capability of listed companies is still on its decline trend and some listed companies continue their severe losses because many of them just eyed on fund raising rather than changing their system during going public, their unchangeable operation system, dated product structure and less competition ability etc. All of these become the big hidden peril for the healthy development of China's stock markets. Listed companies' Merger and Acquisition (M&A) may effectively promote their structure adjustment, market exploring and fund utilities upgrading. Through M&A with listed companies, unlisted companies may go public indirectly or control listed companies, which will bring in market procession to optimize their resources distribution and improve listed companies' quality. To find the characters of Chinese listed companies' M&A and to sum up the experiences of succeed and loss has active meaning for enhancing the qualities of listed companies' M&A. The theme of this article is to discuss Chinese listed companies' M&A system, to analyze the obstacles of M&A and to introduce our ideas on reforming M&A environment for listed companies. The details are divided into five chapters:Chapter one mainly introduces M&A's related theories. Comparing various M&A related benefit resources in theories and analyzing gainers will make for analyzing the motivation of Chinese companies' M&A and reasonably classifying M&A actions. It will also help to fully recognize various listed companies' M&A resulted from special policies and imperfect market systems, and to find the gap between Chinese stock markets and developed countries'. To utilize listed companies' market advantage and to encourage and guide listed companies' M&A will benefit Chinese stock markets' development.Chapter two discusses Chinese listed companies' M&A with evidence. Firstly, we analyze the internal drive, policy orientation and legal environment of Chinese listed companies' M&A. Listed companies have their unique advantages that become the impulsion of their M&A supported by suitable outside environment. Secondly, we analyze the M&A actions while listed companies are target companies. By studying particularly the cases such as the "borrow shell" of Wanxiang-Qianchao and the "buy sell" of Tuopu-Development, we provide the idea of using existing shell resources. Thirdly, we analyze the expending M&A actions while listed companies are M&A companies. Konka's transverse M&A fulfilled its expansion by right of its management advantages; Qinghua-Tongfang's longitudinal M&A fulfilled its expansion by cutting its transaction costs; The mixed M&A like Shen-Jintian fulfilled its expansion through its pluralist business strategy. All five cases listed in this chapter give the details of enterprises' background, M&A process and related performance.Chapter three analyzes the performance of listed companies' M&A. After summing up the basic characters of recent-years' Chinese listed companies' M&A cases and related analysis, we believe: Viewed from the effect of scale, structure, break-even and price, the virtue of M&A has been dig out gradually, but didn't achieve as good as expected. Based on the development conditions and related market environment of Chinese listed companies' M&A, we view the developing momentum of listed companies' M&A. The M&A triune strategy of capital, technology and management will be the main stream. Target companies' selection will extend to well-performed companies from bad-profited "shell company". Medium firms will act significantly during the M&A. M&A services will develop toward socialization.Chapter four illuminates the main obstacles for listed companies' M&A. The special share capital structure is the key obstacle in...