Value Of Merger And Acquisition, Organization’s Ownership Concentration Under Different Competitive Markets

The business world is changing rapidly in recent years, and business merger andacquisition activities have become the central stage of all.Business merger and acquisition activities in China has develop dramatically inthe past decades, large entities merging together redistributed market resources andreshape economic structures; while the Chinese government fully support suchbusiness activity, shelf resources became more obvious, companies with poorperformance became the targets; immaterial assets are the main focus. However,while the quantities are going up every year, the qualities are going the opposite. Howto utilize the value of acquisitions is closely related to the management structure ofthe company. Never the less, under difference circumstances and market competitiveenvironments, the value of merger and acquisition to the company is clearly different.In this paper, the author will focus on comparing different competitive market,and investigate the effect of merger and acquisition to the organizations overallperformance and profitability, also the relationship between ownership concentrationand acquisition value. The process of analyze is to choose two typical monopoly andoligopoly samples in different industries，firstly use factor analyze equation based ontheir financial reports to get the comprehensive index figure, and compare it withpre-acquisition’s figure, hence to develop a chart showing the changes of thecompany’s performance caused by the acquisition. By using excessive competitiontheory, principal agent theory, beyond property right theory, the behavior ofgovernment intervention theory, demonstrated the effect of the acquisition in themonopoly market is not evidently obvious, and the relationship between theownership concentration and acquisition value is not clear, the author believe thatonly under the circumstance which the concentration separated after the acquisition,there is a positive relationship.In conclusion, considering the currently market environment in China,organizations should optimize its equity ownership structure and fully investigatedthe competition mechanism before merger or acquisition; the author advised it shouldimprove the market competition mechanism; develop effective incentive mechanismand restriction mechanism are the first priority.