M&A Performance Evaluation Of Chinese Real Estate Listed Companies

M&A is an important strategic choice to achieve scale expansion,improving the competitiveness of enterprises, but also the adjustment ofindustrial structure, optimize the allocation of resources in an effective way.West merger from the beginning of the19th century, and our acquisition of latedevelopment, is accompanied by economic globalization and China’s reformand opening up, the establishment of a socialist market economic systemgenerated. Since the reform and opening up, with the development of China’sreal estate market, the real estate industry M&A activity are becomingincreasingly frequent. On the one hand, from the characteristics of the industry,the real estate industry is a resource-intensive industries, capital and land is thelifeblood of enterprise development. Since2003our country will continue tocarry out macro-control of the real estate industry, land and credit policies,increased the difficulty of small and medium sized companies to obtain landand real estate funds. On the other hand, from the industrial point of view,China’s real estate market, there is a low degree of concentration, thedevelopment of enterprises, small scale enterprises characteristics, so thatincreased competition within the real estate industry, the continuous influx ofoutside competitors. Therefore, under the dual pressures of the nationalmacro-control and continued competition in the industry, the emergence of anumber of mergers and acquisitions in order to seek survival and developmentof real estate listed companies. Domestic and foreign scholars on M&Aperformance-depth study, but the situation closely with national merger with thecomplexity and diversity, it has been unable to get the same conclusion. Most ofthe current study is a comprehensive study of the entire industry, the few studiesof specific industries, M&A performance study for the real estate industry isless involved, especially our country is in deepening reform, the special period of economic transition, the current background research Under China’s realestate M&A performance of listed companies, has important theoretical andpractical significance.This paper reviews the past M&A performance study abroad; secondlyintroduces acquisition-related theories, including economies of scale theory,transaction cost theory, the product life cycle theory and coordination theory,the acquisition of related concepts were defined; then by a series data and casesummarizes the status quo of China’s real estate listed companies in mergersand acquisitions, and reviewed China’s real estate industry, the developmentprocess and real estate listed companies merger of development, on the basis ofanalysis of the real estate listed companies merger motives, characteristics andthe presence of question; articles selected on the basis of theoretical analysisthrough the use of accounting research method from profitability, operational,solvency and ability to grow four evaluation, real estate companies to buildM&A performance evaluation system, select2008-200948real estate listedcompanies in mergers and acquisitions as a sample, to build an integratedscoring model using factor analysis of real estate companies in [t-1, t+4] duringthe six years before and after the change in M&A performance empiricalanalysis, mergers and acquisitions can study whether to improve theperformance of listed real estate companies to bring on.Through empirical study concluded that the performance of M&A yeardecline in the first year after the merger, the second year and an increase inperformance over the previous year acquisitions and mergers and acquisitionsthat year, third year and fourth year after the merger performance decreasedsignificantly. China’s real estate listed companies in mergers and acquisitionssignificantly improve short-term performance, but can not be sustainedlong-term performance improvement, the overall performance of a downwardtrend. Long-term performance is mainly due to unsatisfactory listed real estatecompanies in the post-merger integration requires a longer period of time in order to achieve economies of scale and synergies of mergers and acquisitions,competitive advantage can be gradually revealed. Therefore, post-mergerintegration management is particularly important. M&A year performancegenerally lower, so the real estate listed companies investors and operatorsshould pay attention to the pre-merger strategic planning, not blindly follow thetrend. Finally, the paper from the government, the real estate industry and realestate listed companies in these three suggestions to improve the performance oflisted real estate companies in M&A.