M & A Performance Of Listed Companies In China

In recent years, global economic integration is accelerating, mergers and acquisitions activity, showing the quantity, scale and international and other major features. M & A is a voluntary method of the enterprise, and it is a non-gratuitous property transaction activity.Now it is increasingly becoming a very effective mode if operation of capital in order to maximize their value."M & A and whether it helps to improve company performance" is the first study of M & A issue; a correct understanding of this issue is not only beneficial to the company manager's decision-making, but also the legal and regulatory departments to develop an important reference for relevant laws and regulations. Therefore, scholars have recognized the importance of acquisition performance, but also made a series of theoretical and empirical study. With in-depth theoretical study, researchers increasingly concerned about difference in quantity of the performance by the different types of M & A(industry-related M&A and diversified M&A). In order to analyse the difference in quantity of the performance by the two types of M & A, many scholars choose different indicators, and they determine which one is better in two ways based on their empirical results. However, in this issue, scholars did not reach a unified understanding, and differences are mainly in whether diversified acquisitions create more value, on the issue lead to two opposite point of view is the so-called diversification M & A mystery.However, through the review of the literature research we found that the performance of diverse M & A results to differ materially reason may be overlooked in this industry life cycle factors. Diversified M&A decision is probable the reaction of the companies to the discount industry conditions of the existing ones before M & A, by which the decline industry managers have an incentive to enter more profitable companies. It appears that the company's industry conditions would have a major impact on the strategic decision-making and performance of the M & A decision, so the differences between the related acquisition and diversified M & A maybe result from the different industry cycles of the companies, not its merits of M & A type. For example, the performance of the companies in the growth industries with related M&A is better than the one with diversified M&A, however the performance of the companies in the decline industries with diversified M&A is better than the one with related M&A. From this, when directly comparing the performance of Diversified M & A with the related M & A, we cannot determine which is the better way without considering the industry life cycle of the company.The main objective of this paper is to reveal the factor of the industry life cycle has a significant impact on acquisition performance. Specifically, the paper selects the list companies in A share market with M&A from 2006 to 2007 as 364 samples, chooses the company financial data, and uses factor analysis to establish the performance evaluation function, to assess the influence on acquiring company brought by M&A, and contrastively test the different performance of M&A with different stages of industry life cycle, and different types. The results support our theoretical hypothesis that M & A performance depends not only on the merits of the type, but also on companies in which the life cycle of the relevant industries, thus it partly answers the mystery of diversification discount merger. M & A type itself is no better one, it is important that the company should adopt different strategies at different stages of industry life cycle, (this paper mainly refers to the choice of the type of M & A).