Research On Brand M&A Performance And Impact Factors

Nowadays, the market is highly competitive, product or service provided by companies shows an apparent trend of homogeneity, which makes brand the main source of competition advantage and company’s strategic wealth. To gain brand or brand related resources through M&A can help companies to quickly enter a new market, expand distribution channels and enhance brand connotation. No matter the frequency of occurrence or the transaction scale of brand M&A becomes bigger and bigger, which provides Chinese companies a great opportunity to lever up brand recognition and enter overseas market. However, there are not so many brand M&A related research or theories, especially studies on brand M&A performance are rarely seen.Based on literature review on both brand and M&A related studies, the thesis made discussion and summary on existing brand M&A research result, then defined brand M&A as a way of capital operation which is in order to gain brand equity through paying relatively high premiums. The thesis discussed and defined brand M&A performance from both macroscopical and microscopical aspects. By exploring impact factors of brand M&A performance from four aspects, including enterprise scale, ownership structure, financing ability and transaction features, the thesis proposed research hypotheses and analyzed the relationship between brand M&A performance and the impact factors by empirical method.This thesis has chosen 61 brand M&A cases which occurred in Chinese listed companies from 2002 to 2006, mainly used the financial index analysis method as well as brand value index to evaluate the performance of brand M&A. The study found that the brand M&A performance of the acquirers declined in the medium and long term, but the brand value increased at the mean time. The multiple regression method is used to analyze the relationship between the impact factors and brand M&A performance. The result shows that retained earnings per share of the acquirer has a positive correlation effect on brand M&A performance, because adequate internal retained earnings can provide sufficient cash to support M&A activity and integration process; Whether the acquirer and the acquired company belong to the same jurisdiction is positively related with the acquirer’s financial performance in brand M&A; The impact of total assets growth rate on brand performance needs to be further discussed.