The Empirical Research On M&A Synergy With EVA Model

Since2002, China’s M&A transaction increased dramatically, so did thefailure cases and the complexity of each transactions. It seems critical toevaluate the M&A deal and the synergies afterwards. In this paper, we use32samples sifted from more than3000cases that had merger or acquisitiondeals in2007, then analyzing the M&A synergies during2006-2011withEVA model. The results showed that the majority’s EVA droppedsignificantly in two years after M&A, and then began to improve after threeyears, indicating that the merger synergies appeared after two yearsintegration. The study also found that impacts of the acquirer background,M&A type, or the target industry are very complex and difficult to measure.What’s sure is that a company with larger net assets, merging a relativelysmall size of the company, is more likely to be successful and have higherEVA. I’m sure these findings can help the acquirer determining the M&Astrategy, choosing the targets, reducing the risk in the future.