Merger And Acquisition Performance Of China’s Real Estate Listed Enterprise

After thirty-year’s development, China real estate industry has become pillarindustry of the national economy. Many issues of the China real estate industry havebeen accumulated during the development process. Along with the soaring of the housingprice, the regulation and control measures on real estate industry become stricter andstricter. China real estate industry is suffering the increased difficulty of acquiring theearth and matter of fund squeeze due to the change of land transfer mode and tightmonetary policy. Meanwhile, the unbalance allocation of resources in the industry andregional difference policy makes the company which holds earth and projects resourcecan’t carry out the work because of the lacking of funds, and also cause the enterprisewhich owns sufficient funds lacks earth and projects due to regional limitation. Hence,the presence of such issues speeds up the merger and acquisition activities of China realestate industry, and aggravates the process of industry reshuffle. Frequent merger andacquisition activities enhance industry concentration degree, and facilitate the forming oflarge enterprise group. However, the merger and acquisition behavior of enterprises is acomplicated activity, and the performance of merger and acquisition is differentdepending on the different merger and acquisition motivation.The paper takes China listed real estate enterprises which have mainland merger andacquisition activities as research objects. First, based on discussion of related theory ofenterprise merger and acquisition, it summarizes the home and abroad research situationof motivation and performance of enterprise merger and acquisition. Next, the development condition and merger and acquisition current situation of China real estateindustry is analyzed and obtaining land project resource and resolving financing troubleare the motivation of merger and acquisition of real estate enterprises is pointed out.Further,47sample companies are selected among the merger and acquisition cases oflisted real estate enterprises in2010, the composite score function of performance ismade by using factor analysis. By analyzing the mean value, single factor variance anddifference value of the performance composite scores of the sample companies in theyears before, after merger and acquisition and the same year of merger and acquisitionand the second year after merger and acquisition, it found that the performancecomposite scores were increasing in the same year of merger and acquisition as well as inthe second year after merger and acquisition, and decreasing in the year after merger andacquisition, the overall performance is improved but the effect is not notable. Meanwhile,research on the mean value analysis, single factor variance analysis and difference valueanalysis of the performance composite scores of the classified sample companies iscarried out, the results show that the overall merger and acquisition performance underthe guide of strategy expansionary merger and acquisition motivation is improved, butthe effect is not notable; and the overall merger and acquisition performance under theguide of resource integrated merger and acquisition motivation slumps withoutimproving. Finally, some reasons on the unremarkable performance are pointed out in theconclusion of the paper, it also believes that enterprises should have right merger andacquisition motivation, set up the long-term development of strategic objects to improvemerger and acquisition performance and the blind merger and acquisition action shouldbe avoided; meanwhile, the integration after merger and acquisition should bestrengthened to enhance the management and control ability to capital, and theinternational management talents should be cultivated to facilitate the merger andacquisition performance.