The Empirical Research On M&A Premium’s Influencing Factors Of Chinese Listed Company

As the increasing of M&A activity during enterprises, scholars pay moreattention to M&A premium which play an important role in M&A success rate. On thebase of present M&A premium research, this paper divides M&A premium into threetypes: asset premium, option premium and synergy premium. This paper selects theagreement to acquire case that the target companies are listed companies between2006and2010, studies the current situation of Chinese M&A market, and searchesdeep-seated reasons why premiums exist in Chinese M&A market.In order to look for the influencing factors of the three types of premium, thispaper uses the sample data to do the empirical analysis separately on the b asis oftheoretical analysis. The results show that, the asset premium is significantly relatedwith ROE、P/BV、the growth rate of ROE and the market value of the target company;The option premium is significantly associated with the growth rate of EPS、thegrowth rate of ROE、the debt-to-asset ratio and the volatility of the target company;The synergy premium is significantly related with ROE、PE、the growth rate of ROE、P/BV and the proportion of the acquisition; And the M&A premium is significantlyassociated with ROE、the growth rate of ROE、P/BV and the debt-to-asset ratio of thetarget company.In order to get a more comprehensive consideration of the relevantfactors, the author adds the historical performance of the target company and themacroeconomic environment into the model. The results show that, the historicalperformance of the target company can significantly affect the level of M&A premium;China’s economic stimulus policies after the financial crisis significantly in2008enhanced the level of the premium. The relationship between the three premiums andthe M&A premium is quested and the results of the empirical analysis of the relevantvariables show that along with various level of three premiums, the determinant of theM&A premium changes correspondingly. Finally, the classified research of thesamples according to their different industry shows that, M&A premium is mainlyasset premium when the target company is industrial enterprises; when the targetcompany is non-industrial enterprises, M&A premium is mainly option premium. TheM&A premium of the manufacture is significantly associated with ROE and theproportion of the outstanding shares, M&A premium is mainly asset premium, andwhen the target company is wholesale and retail trade, M&A premium is mainly option premium.Overall, M&A premium of the listed companies is mainly built up by assetpremium in China at present. Therefor, in our country’s M&A activities of the listedcompanies in the future, acquirers should pay more attention to value added comefrom call option and synergistic effect, which can not only improve the possibility ofM&A success, but also the efficiency of resources allocation.