An Empirical Study On M&A Performance Of China’s Listed Companies Based On The Nature Of Ultimate Controller

Since the1990s, the world has experienced fifth the wave of mergers and acquisitions(M&A),the focus of scholars debate is M&A create value. Stein pointed out that the system of weak investor protection environment, ultimate controller of the company may emptied listed company, the effectiveness of China’s securities market is still in a weak phase, the ultimate controller of nature have a significant impact on M&A performance, researching the ultimate controller of nature influence on M&A performance of great significance. Scholars from the perspective of the M&A motivation, payment, the type of industry research M&A performance numerously, but from the perspective of the ultimate controller of nature rarely, and according to China’s securities market regulations listed companies need disclose the information, tracing the ultimate controller and its nature is feasible.The thesis’s purpose is to research effect of ultimate controller in M&A performance through empirical study, to provide advice for the listed company’s M&A, to provide reference for the relevant departments to formulate regulations, to help investors proper interpreted listed company M&A policies. Based on the review of related literature, parse of theory of M&A performance and method, combined with China’s particular institutional background, proposed the thesis’s hypothesis, taken the listed companies for sample which have M&A activity in Shanghai and Shenzhen stock during2007to2009, built multivariate linear regression performance evaluation model. Firstly, using cumulative abnormal returns obtained by Event Study, research the relationship between the ultimate controller of nature, control mode and the M&A short-term performance, then using company’s consolidated performance scores which based on principal component analysis and financial index-method calculated, research the relationship between the ultimate controller of nature and the M&A long-term performance.The results show that:(1) The government-controlled company’s M&A performance is superior to non-governmental controlled.(2) The merger company’s stock price will be down before the merger announcement then up show that M&A create value to the company.(3) When the control right low50%,there is occupation effect of the cash flow of the ultimate controller on the M&A short-term performance, otherwise when the control right over50%,there are incentives of the cash flow of the ultimate controller to the M&A short-term performance.(4) The layers of ultimate controller, separation of control and cash flow rights have a negative correlation with the M&A long-term performance, and the non-governmental controlled companies are more serious than government-controlled.(5) The government-controlled company’s long-term M&A performance depends on the incentives of tunneling and the negatives of government intervention.