The Performance Research On Mergers And Acquisitions Of Listed Real Estate Companies In A Share Market

Currently, the capital market is an important place for resourcesallocation. Up to year2012, the M&As have been developing over twentyyears in China and about one thousand of A share listed companies havedisclosed the M&A events. Since China is still in the period of economictransition, the development of M&A market is particularly important.Performance Research is very popular in theoretical study of M&A. Butso far, whether M&A can improve corporate performance still no unifiedview. Because of the special economic and social environment, making themotivation of listed companies M&A has become very complex, resultingimpact on the performance of M&A become significant uncertainties. It isvery necessary to make in-depth analysis of M&A motivation andperformance validation.The real estate industry maintain a rapid growth in the last10years, thefirm size and industry structure have undergone profound changes. High-growth industries tend to be the most active industry of M&A activities.Toselect real estate industry as the example for M&A performance study, onereason is because of the abundant number of cases, the second is to helpenhance the high-growth industry awareness and understanding of it’s M&A activity, which can provide theoretical reference for the future high growthindustry M&A activity. Against this background, this paper studies the literature on M&A.Basedon the analysis of status quo of China’s real estate industry’s M&A activity,historical background and motivation, we chosen11merger cases of realestate industry M&A events in A share market, respectively, using eventstudy method and financial indicators study method to investigate changes inshort-term and long-term performance of listed real estate companies.Firstly, this paper use the Event Method to analyze the average CAR forthe acquiring listed firms in year2010. The analysis indicates: within theevent period [-30days,30days], the acquiring companies’ CAR has beenslightly increased, but it was not obvious in T test, so the acquiringcompanies’ short-term performance had not been improved and theshareholders could not absorb CAR through the M&A events.Secondly, this paper uses the Accounting Method to conduct long termperformance research for the sample companies. The analysis indicates:within a longer observation period from2008to2012, except for the poorlong-term solvency, the indicators in other areas, such as aspects ofprofitability, operational capability, growth abilities and cash flow showedimprovement after the first weakening trend. Overall, the long-termperformance of sample companies is positive.Finally, this paper uses the results of the above analysis to give someadvice for the M&As development in the view of microcosmic andmacrocosmic.