Empirical Research On The M&A Performance And Influence Factors Of Chinese Real Estate Listed Companies

Since the BaoYan M&A events happened in September1993, listed companies’M&A wave are constantly emerging. Through M&A, listed company can dispatchresources appropriately, expand the manufacturing operation, lower transaction costs,realize synergy effect, enhance the brand awareness, increase market share, andmaximize shareholders equity, etc. M&A becomes an effective means for enterpriseto develop greatly strong.Since1990s, the real estate industry is the focus of Chinese economicdevelopment and has become the foundation and pillar industry. According to theimportance of real estate and the housing bubble, government continued to strengthenland and capital regulation. The double pressure of land and capital forces small ormedium-sized enterprises to left the estate market. At the same time, large real estateenterprises have enhanced enterprise’s competitive competency through M&A forexpanding the scale of enterprises and reducing operating cost. M&A increases themarket concentration and optimize the industrial structure.This paper combines standard study with empirical research, the major topic ofthis paper are whether M&A can improve listed real estate companies’ performance,and what factors affect the performance in M&A. This main purpose of this paper isto provide some reference for Real estate enterprises’ effective M&A, and to giveguidance for the government and regulators to create M&A codes of conduct.In the process of research, this paper firstly reviews M&A and its influencefactors about performance literature from home and abroad, introduces different typesof M&A and analyzes M&A motivation from the view of various perspectives ofstakeholders. Secondly, according to characteristics of Chinese real estate industry,this paper describes the present status of the development of Chinese real estateindustry. Then, author analyzes7major influence factors from the M&A transactionfeature and the characteristics of the enterprises. Influence factors include connectedtransaction, object of transaction, payment term, shareholding structure, free cashflow and integrated management. Finally, by using accounting index method, factoranalysis method and backward regression method, this paper gives the demonstrationanalysis on the value and performance of110listed companies that have experiencedmerger and acquisition in2010.Empirical research gets the conclusion that: Firstly, most of the real estate listed companies’ long-term performance improved in our country through mergers andacquisitions; Secondly, the performance through assets acquisition is better thanequity acquisition; Thirdly, free cash flow is negatively related with M&Aperformance; Fourthly, state-owned shares ownership and cost of integratedmanagement are positively correlated relationship with M&A performance; At last,related party transactions and ownership concentration have no significant effect ofthe real estate industry M&A performance.