Analysis On The Performance Of Transnational M & A In Telecommunication Industry

This research focuses on the motivation and performance of cross-border merger and acquisition in telecom industry. In recent years, the global telecom industry has gone through a merger and acquisition upsurge. However Chinese telecom companies seem to be still restricted to domestic market while most of them are among the top operators in the world in terms of subscribers and revenue. Through in-depth analysis of global merger and acquisition, I attempt to offer some meaningful references to Chinese telecom companies.Through conducting factor analysis of the merger and acquisition deals in telecom industry from1999to2009with the time horizon from2years before the transaction to2years after the transaction, it is found that deals do bring positive influence on the performance of the acquirer while the impact on the target is quite negative. In addition, the performance of cross-border merger and acquisition is much superior to the domestic merger and acquisition, which is a good proof to encourage Chinese telecom companies to expand business outside homeland.After running the multi-regression model to study the factors influencing the performance of the merger and acquisition, I found that the percentage of transaction value to the total assets of the acquirer and ROA of the acquirer one year before the transaction do have positive effect on the short-term merger and acquisition performance. Therefore, only does the acquirer itself have strong ability to operate business and earn profit can it have more chance to enter a successful merger and acquisition deal.