The Analyze Of Chinese Enterprise Cross-border M&A Performance

With the globalization continues, capital flows continuously today, and cross national mergers and acquisitions (M&A) become the main outward investment way for some enterprises. At the very beginning, M&As are uniquely utilized by excellent corporations in western developed countries, which are the main force in international mergers and acquisitions market. A host of companies in developing countries begin their journey of M&A as the result of economic growth. Since the middle of1990s, while M&A happened in developing countries, the global economic pattern is changing. The importance of M&A comes out gradually.As the biggest emerging economy, there is no doubt about China’s imperative share in international investment network. More and more foreign firms set their foot in China. Inspired by the Chinese government’s strategy of "going out", an increasing number of Chinese enterprises’step into overseas market. The period after the post-crisis in2008witnessed the wave of mainland corporations’mergers and acquisitions. What this paper is trying to figure out is whether enterprises’ performance improved or not after M&A, and what should they keep in mind during M&A. Indications and implications in M&A for Chinese corporations are expected in this way.This paper proposes the studying content based on the overview of existed cross national merger and acquisition theories and studying works both domestic and overseas. The present study analyzes the performance differences between pre-M&A and three years after the M&A, and classifies the sample companies according to the cultural factors. It demonstrates the problems that the listed companies face today and proposes some policies and suggestions for them.The structure can be divided into five parts as follow:Part one:analyzes the studying background, objective and significance and indicates the creative aspect of the study.Part two:overviews the existed cross national merger and acquisition theories and studying works both domestic and overseas. Part three:probes the growing history, current situation, characteristics and motivation of Chinese companies’M&A in order to have a comprehensive understanding of the development of their M&A overseas.Part four is based on companies who have taken M&A from2005to2009, analyzing empirically the performance because of M&A, as well as the cultural indices.Part five:summarizes problems existing in Chinese companies and proposes the available policies and suggestions.After analyzing the samples, it is concluded that the merger and acquisition performance handled by Chinese enterprises shows a downside "U" shape. Classified samples also indicate that companies who mergered or acquired Hongkong enterprise performs better than those did not.Creative points for this study are as follows:Firstly, the cross national merger and acquisition of Chinese enterprises is divided into four stages. The present study keeps the research spotlight on recent mergers and acquisitions, especially some influential ones in2012.Secondly, absorbing M&A data of merger and acquisition in2012strengthens the accuracy and timeliness when displaying current situation of M&A. By evaluating the performance in this way can the conclusions be more practical.Thirdly, according to the Chinese realistic characteristics, we prefer accounting study rather than event study in empirical analysis. The cultural factor brought in this study maintains an important supplement in the comparison of M&A performance.Shortages for this paper are as follows:Firstly, the studying samples only contain those companies which are listed in Shanghai and Shenzhen stock market. The unlisted companies are wiped out in order to maintain the authenticity and effectiveness of financial data.Secondly, because of the difficult availability of certain listed companies’ financial sheets, semi-annual financial reports are used rather than annual ones in2012, which may bring some mistakes in terms of the empirical results.Thirdly, besides the overall M&A performance and culturally different samples’ M&A performance, other possible factors need be taken into consideration for further development in the future.