Research On The Performance Of Transnational M&A In China To The Local Listed Companies

Since the1990s, the world economy is accelerating in its integration process. International capital flow is becoming more and more convenient. Transnational M&A replaced the Greenfield Investment by its advantage of low cost and low risk, which is gradually becoming the main form of Foreign Direct Investment. As the development of China’s capital market system, China with its sustained economic growth, huge market capacity, cheap labor and other beneficial factors is attracting a large number of multi-national companies to invest here. A growing number of multi-national companies merges in China, occupy China’s market, which also bring considerable funds, advanced technology and scientific management methods. But whether the transnational mergers can improve the performance of listed companies in China is worthy of our attention and need more research. Our paper take this as a starting point to research the transnational M&A in China under the special economic background. Focus on China’s listed companies’ performance and its influencing factors. In order to provide some guidance for the listed companies in China when facing the transnational mergers and acquisitions.This paper start from the domestic and foreign theories on M&A performance, sums up its relationship with M&A motivation, industry related degree and method of payment, then overview the method of performance evaluation. Based on the theory of cross-border M&A, take transnational mergers in China as the object of our study, combined with the actual situation to analyse its reasons, ways and characters. Select45China’s listed companies which were merged by multi-national companies from2001to2009as samples. According to the financial data of five years before and after the mergers, from the perspective of M&A way, industry related degree, whether the transnational companies control the options and the stock size after M&A in order to analyse China’s listed companies’performance comprehensively. At the end of this paper get the conclusions based on the previous study. Put forward some opinions and suggestions in both microcosmic and macroscopic level to be helpful for China’s local listed companies to accept the transnational mergers and acquisitions.