Influencing Factors Research On The Payment Method In M&A Of The Listed Company

Enterprise merger and acquisition activity as a capital activity in the enterprisedevelopment plays an important role, it is an effective way for enterprise to integrateresources, achieve rapid expansion, improve market share and become thecompetitive advantage. Merger pay as the last link of merger and acquisition activityplay a crucial role, the choice of the methods of payment must be from theenterprise’s actual conditions, fully consider the various factors which influence thebest choice of payment. In our country, the merger and acquisition activitydevelopment process of the public company, cash payment is always the primarymethod, payment method is relatively single. Therefore, our country’s research of thechoice of payment method is relatively weak. With the2005equity division reformstart, our country’s M&A payment method is headed in the direction of the diversifieddevelopment.This paper analyzed the reason why the current payment method is single inM&A, largely due to the country’s capital market is not perfect, the financing channelis not clear and the long-term equity division. Combined with the present situation ofthe development of China’s M&A payment to analyze the effect on our country’sM&A payment choice of factors, including the financial position of the company, thecompany controlling interest before the acquisition, the company’s stock price level,the characteristics of the target company and relevant laws and regulations, andanalyze how these factors affect the choice of the ways of payment.Based on the study of related literature at home and abroad, we choose the240mergers events which happened in Shenzhen and Shanghai Stock Exchange’s A-sharemarket and on meet the conditions as the research object. There have127cases usecash payment method in M&A,87cases use stock and26cases use bearing debt. Wecollected the financial statements before the acquisition, according to the presentsituation of China’s M&A payment and the foreign scholars’ study experience, wedesigned seven variables, including the target company logo, mergers andacquisitions’ industry consistency, relative transaction scale, the company controllingstake, tangible assets, financial leverage and cash flow rate, established the Logisticregression model to analyze the influence factors which effect the choice of paymentmethod in M&A. The empirical results show that: first, the target company logo, thecompany controlling stake and cash flow rate present positively relation with cash payment method, second, mergers and acquisitions’ industry consistency, relativetransaction scale and the financial leverage present negatively relation with cashpayment. Third, Whether the public company choose cash payment method or nothas no significant relation with tangible assets, and not enough to discriminate anddifference between cash payment and bearing debt payment. Finally, this article,based on the empirical conclusions, we put forward some suggestions for the choiceof payment method in M&A of our country’s public companies.