An Empirical Study On The Performance In The M&A Events Of Listed Companies

In recent years, the M&A activities, especially those with listedcompanies involved, increased obviously in China together with theimprovement of capital market and fast development of China economy. Isthe performance of the list companies improved through the M&Aactivities? How is the short-term market reaction performance and thelong-term financial performance of the M&A events? The reform ofnon-tradable shares was basically finished in2008, does the marketreaction performance of the M&A events show different feature after that?Take respectively the107M&A events between2005and2008and101M&A events between2009and2012as sample, the event studysuggest below conclusions:1)The Buyer cannot get obvious marketreaction performance in the time window (-10,10) before the reform ofnon-tradable shares. There is obvious information leakage before theannouncement. Obvious positive CAAR is observed in the time window (-1,-1). The CAAR in time window (1,10) is negative obviously. Thesuggest that the market holds negative attitude on the M&A deals. Theaccumulated abnormal return before announcement disappear quickly afterthe announcement.2) The regression result of the107listed companieswho are the Buyers in the M&A deal shows that the long term financialperformance, which is evaluated base on industry adjusted net equity cashreturn, deteriorate obviously. The market reaction performance in the timewindow (-9,1) negatively related to the long term financial performance.This suggest that the market reaction in the short period before and after ofM&A events, before the reform of untradeable shares, is mostly the resultof speculation.3) The market reaction performance from the sample in2009-2012is obviously positive in the time window (-10,10) with CAAR1.8%. The AAR and CAAR of time window (1,10) is obviously positivewhich means the market holds positive attitude on the M&A deals.