Research On M & A Performance Of State - Owned Enterprises Based On Stock Returns

There is no doubt that China has the most extensive state capital all over the world. Even though the government has been reforming the state-owned enterprises more than 36 years, there still exist some rooms for the state-owned enterprises to improve their performance. Firstly, this article selecting related data of listed companies from 2006 to 2014, and using the FF three-factor model which added state-owned shareholding ratio to analyze the relationship between the state-owned shareholding ratio and the overall operating efficiency of enterprises. As the result shows among the selected 37 sectors, there exist negative relationship between the state-owned shareholding ratio and the overall operating efficiency of enterprises in most sectors, and only few of them shows the positive relationships, which means it is necessary to continue the reform of SOEs. Secondly, this article analyzes the market reaction to the 1307 equity merger board published plans in 2014 to discuss the feasibility of mergers and acquisitions through equity financing under the general market environment. The results reflect the following arguments. Firstly, market has high degree of recognition on mergers and acquisitions of listed company, therefore, the state-owned enterprise which has poor cash flows can perform the diversification strategy through the directional and additional purchasing assets. Secondly, the poor managerial listed state-owned enterprises which has the market values on less than 2 billion yuan may consider selling their shell resources. Thirdly, the SOEs which are interested in industrial transformation and upgrade from financing can enjoy the benefits from shell listed. The military, retail trade, medicine, electrical equipment and the media are the better acquisitions subject and we should try our best to acquire large assets, extend the new business proportion in a range of enterprises capacities permit. Some traditional, less-growth and much-needed restructuring sectors like chemicals, home appliances, real estate, machinery, automobiles, light manufacturing which have less than 3.5 billion yuan market value may consider diversification acquisitions. The mergers and acquisitions through major shareholder injection of assets has lower feasibility in the traditional industry, but the higher the feasibility of new industries.