Empirical Study On The M&A Listed Companies Performance In China

M&A generally refers to mergers and acquisitions. Merger means two or more independent companies merging into a business entity, usually a dominant company absorbing one or more companies. Acquisition refers to an enterprise using cash or marketable securities to buy another company’s stock or assets, to obtain the ownership of all the assets or an asset of the enterprise or control the company.Under the background of deepening economic globalization, the deepening of China’s reform and opening and innovative market economy, as well as international and domestic markets increasingly open and close cooperation, in order to improve the competitiveness of the industry and monopoly power, increasing the market share and industry voice and control, mergers and acquisitions of listed companies activities have become more and more actively, expanding the company size and industry competitiveness to cope with the increasingly fierce global competition. Foreign mergers and acquisitions activity first started in the United States for the first time after the1893economic crisis, the main type of merger is a horizontal merger, the merger wave rapidly promote industrial and economic development of the United States. Up to now, the West has experienced M&A activity has five wave, the wave of these acquisitions significantly expanding its business scale and improve the company’s market share, and promote the rapid development of the economy. Compared with the historical development of overseas M&A activity, the development of China’s history is very short acquisitions, mergers and acquisitions of Chinese enterprises after the reform and opening up started in early total has gone through three major stages of development. In promoting the rapid globalization of economic development, rapid development and opening up of China’s capital markets, a new round of mergers and acquisitions wave will emerge. China’s market economy experienced a short-lived merger pains whether achieved the desired results? Whether a company through mergers and acquisitions to enhance the market competitiveness and industry influence, creating valuable performance and the company’s operating performance improved after the effective merger? This paper studies whether these mergers and acquisitions activity can bring improvement in performance provides specific research directions.The research object of this paper is the companies finishing M&A activities in2010, using financial index method to compare the improvements of companies performance before M&A activities happening, in M&A activities and after M&A activities. We will establish M&A performance evaluating models using finance index. Finance index method refers to use the main index of the financial statements to establish the comprehensive models of evaluating companies performance by factor analysis model, justifying whether the companies performance have been improved.This paper is divided into five parts, the first part is an introduction.This part focuses on mergers and acquisitions of domestic and foreign research background, research ideas and methods. Besides; also briefly introducing the innovation and the lack of this article. The main innovation of this paper is to establish comprehensive evaluation system of measure performance of M&A according to the actual samples and to use an integrated multi-dimensional approach factor analysis; the main problem is we can not draw more general conclusions in a long period limited to the short-term study.The second part describes the domestic and international literature review on M&A performance, summarizing theoretical research and literature of domestic and international M&A activities from financial indicators and the event study method.The third part of this article is to explain the theoretical basis of M&A performance from four aspects, namely efficiency differentiation theory, agency theory, information theory and hypothesis and signals the market right hypothesis.The fourth part is the empirical analysis part, also the main core of the paper. Firstly, we introduces the sources of data, followed by the selection of financial indicators. By SPSS statistical analysis software, using factor analysis model for M&A events occurred in2010with listed companies to do empirical analysis, we want to filter the listed companies comply with the conditions of the sample to financial indicators2009-2013annual M&A performance of listed companies to establish a comprehensive evaluation function. Empirical test analysis results using factor model show that the overall performance is still significant, the company bringing a positive change in performance, the listed company’s M&A events proved to be effective. The final part is the lack of empirical analysis in this paper, one is that it can only explain that the short-term changes in M&A performance is obvious, while the long-term performance change can not be effectively proved limited to the research period; the other is that the selected financial indicators are still less and can not fully reflect the whole effective changes in M&A performance.The fifth part is the conclusions and recommendations of this paper. According to the empirical results from2009-2013M&A performance, we can conclude that the trend of the performance changes is firstly increasing and then decreasing process, on the whole the company’s general business conditions get gradually improved after finishing M&A activities. Based on empirical Analysis results in the fourth part and some of the problems on M&A occurring in our country, we raise three major recommendations, namely merger-related policies, economic effects of M&A and involving into a new industry.