Whether M&A Creats Value

Throughout the evolution of the world industry, merger andacquisition is an eternal topic. The mature western market has gonethrough five M&A waves. During two decades of vigorousdevelopment, Capital market has also gone through several stages inChina. Theory and the practice fields have concerned whether M&Acreates value. In the new economic environment, the economic roleof M&A activity will be further strengthened. The fundamental roleof the M&A activity is to enable enterprises facing the newchallenge and opportunity more effectively.This study is a combination of the stock prices of listedcompanies during2006-2011and the financial data of TsingtaoBrewery in1996,2001and2010which are the turning points of thislisted company in China. From the aspects of enterprise synergy andfinancial performance, I research on short-term and long-term M&Aperformance of Chinese listed companies in China by the eventstudy methodology and financial contrast methodology. I hope Iwould make some contribution to the subject of ‘Whether M&A creates value’, which provides some quantitative understanding andbasis of making decision for the part of the M&A cases in the future.For Chinese enterprises, the bidders, through a correctunderstanding of this subject, can make a rational decision on theactivity of M&A and avoid the blind of expansion without valuecreation. M&A practice promotes the development of the theoreticalstudy of M&A. And the development of theoretical study providestheoretical guidance for the practice of M&A. So far there is noconsensus about the research field of ‘Whether M&A creates value’in the academic community. However, all business activities are tocreate value, which is the basis for the evaluation of M&A project.M&A plays important role in sustainable development of enterprises,and it need urgently research in M&A practice. It is critical for theenterprises, the legislators and the regulators to understand thissubject correctly.