Private Mergers And Acquisitions Of Listed Companies

The M&A of public company by private company is a special M&A between corporations and a shortcut for private companies to enter the stock exchange indirectly. Since 1997, with the development of stock market and the strengthening of private companies, the phenomenon of M&A of public company by private company have emerged continuously. The paper studies the social, economic and institutional reasons for the phenomenon both theoretically and demonstratively, and the positive effect both to the company and to the society. The paper is consist of six sections:The first section introduces the related definition and the reasons of M&A of public company by private company and put forward the studied object, including the definition of M&A, the reasons of M&A, the classification of M&A and the related situation in china.The second section analyses the internal and external reasons for the emergence of M&A of public company by private company in China, based on the common reason of Chinese companies' M&A.The third section analyses the effect of M&A comparing with the developed stock market in western countries. It concludes that not all the M&A are efficient; some can lead loss of the society.The forth section analyses demonstratively the effect of M&A of public company by private company, including M&A's benefits and operate benefits. The paper chooses the M&A cases took place in Shanghai and Shenzhen stock exchange; adopting cases study method and financial index method. It concludes that some of the M&A react overly and the consistency isn't good, the M&A is not successful.The fifth section analyses the factors influencing the performance of private company mergering Pubic Company and concludes that the explainatory ability of industry and companies' character is limited, mergering to some extent appears break through "institutional restraining".The last section is conclusion that summarizes the concept of private companymergering public company and put forwards some advice that would benefit the private companies and the mergering market.