The Effect Of Agricultural Business’s M&A On Shareholder Wealth

In the process of agricultural modernization, agricultural enterprises take hugeresponsible of history mission. As China’s basic national conditions and the special nature ofagricultural enterprises, agricultural enterprises will be destined to develop through scaleeconomies, while in this mode, it is inevitable to seed up the process of enterprises mergersand acquisitions.Currently, academic research about mergers and acquisitions affect onshareholders’ wealth are very rich, but there is little research aim at agricultural enterprisesmergers and acquisitions, especially the methods to merge, which are how to choose mergetypes and opportunities, the researches are very few. This paper made empirical analysis ofagricultural listed company mergers and acquisitions on shareholder wealth effect, madeconclusion that mergers and acquisitions how to impact on shareholders’ wealth, enhanced thecontent of shareholders’ wealth, and Provided theoretical suggestion to company mergersand acquisitions.In this paper, the merger environment of agricultural listed companies are discussed indetails. The merger and acquisition environment is analysed and evaluated objectively.According to the conclusion of the study, the corresponding suggestions will be proposed. Theresearch object is the data of acquisition of agricultural listed companies. Using the excessreturn rate which is before and after M&A, just totally60days, reflects the change ofshareholder wealth effect. The excess return rate will be analysed comparatively though theview of a single sample and the total sample. Based on the analysis of a single sample, oneconclusion is proposed: the level of profit restrictes M&A wealth effect; though the totalsample analysis, the second conclusion is: the behavior of China’s agribusiness’s M&Ashareholders have negative effect on the shareholder wealth. On the category of datas for thefurther research, the last conclusion is: the horizontal merger makes negative influence.Based on the empirical results, the healthy countermeasures will be proposed. One ofthese is the agricultural enterprises should choose the poor condition of companies. Theenvironmental of M&A leads to lower shareholder wealth mergers, either the correspondinglegal laws and regulations, or the role of intermediary agencies can reduce governmentinterventions; the last one is the time of M&A which must be considered. Through the aboveresearch and analysis for the agricultural companies, valuable development countermeasure is provided and protects the interests of the shareholders.