The Research On Influencing Factors Of M&A Premiums Of Tmt Listed Companies In China

Along with the boom of the mobile Internet, Internet financial as wellas new media, TMT industries in China are ushering in another wave ofM&A. The success of an M&A case depends much on the price, which isto a large extend relied on M&A premiums. M&A premiums in TMTindustries differ much from that of traditional industries in cause andinfluence, due to the unique features and development pattern of TMTindustries.M&A premium theory for traditional industries can’t explaininfluencing factors in the TMT sector objectively and comprehensively,without taking into account unique features of TMT industries.Based on M&A motivation theory and private benefit of controltheory, this article explores the cause of M&A premiums of TMT listedcompanies in China. Through regression of381M&A cases of TMT listedcompanies in China from2001-Feb.2014, this paper comes to thefollowing conclusions.1) M&A premiums are relevant to M&A for diversification;2) The proportion of holding share by the first large-shareholder haslittle influence on M&A premiums;3) M&A premiums are relevant to the size of shares transferred.4) M&A premiums are higher when is paid with stock than cash.5) M&A premiums are relevant to P/E ratio of the TMT Listedcompanies;6) M&A premiums are higher when the target is popular thanunpopular;7) Whether the target has been invested by PE/VC has little influence on M&A premiums;By examining the influencing factors of M&A premiums of TMTlisted companies in China from theoretical and empirical perspective, thispaper contributes to the practice and theory of M&A premiums and servesas a guide to stock watchdog as well as TMT listed companies.