Empirical Study On Serial M&As In SME And GEM

The M&A market in China has developed a lot recently especially the dealsinvolving listed companies. There are many companies taking M&A as its expansionstrategy and make lots of acquisition in short term, especially in those small sizecompanies in GEM and SME. So this paper chooses to conduct research in this fieldwith669cases in our research since2007.US researchers have done study on this area with Fuller’s paper in2002indicating that the serial M&A has marginal decreasing effect on wealth effect ofstocks. However, there are few researches in China about serial M&As especially inGEM board.This paper uses event study with measurement of CAR and find that theacquiring firm of SME and GEM will have positive on serial mergers with privatetarget. Serial mergers has better performance with higher M&A sequence, which isquite different from the previous research. The similar outcome is found in ourcomparison group in main board.The paper then analyses some influencing factor likes relative size and valuationetc.. and some local characteristics such as stock payment and non-horizontal/verticalM&A in serial M&AsThe phenomenon that serial mergers has better performance with higher M&Asequence comes mainly from significant learning effect and short-term overconfidence. The learning effect comes mainly from more frequently using stockpayment and decreasing M&A interval which enables marketing timing ability.