An Empirical Study Of Mergers And Acquisitions Motivation On The Impact Of M&A Premium

Today the world economy is evolving, phenomenon of Mergers and Acquisitions (M&A) between companies have become increasingly frequent. This is because, through the acquisition of companies can achieve an effective combination of resources and complementary advantages, it can provide a shortcut for the enterprises to be bigger and stronger. Today, in the business world, M&A has become an irresistible trend of the world, increasing scale and increasingly wide range of M&A, and accordingly, the amount of M&A is becoming higher and higher. However, many research results have indicated that the majority of M&A is unsuccessful. Pay excessive premiums is one of the factors that can not be ignored. Therefore, the study on M&A premium factors and the influence level of these factors is both theoretical value and practical significance.M&A motivation is the starting point of corporate M&A, companies and managers may initiate acquisitions for different purposes, which may lead to the defeat at the purchase price negotiations, and pay a higher price. This paper will focus on the M&A motivations that can impact premium, so that the companies will avoid these motivations as much as possible in the acquisitions, to improve the efficiency and the success of Mergers and Acquisitions.At first, this paper starts from the M&A motivation, introduces some popular motivations currently, includes motivations of diverse acquisitions to spread risk, seeking synergetic effect, agent motivation, getting the control power to gain binifit for themselvs, pursuing market power and other motivations, theoretically illustrate the relationship between M&A motivation and premium. Secondly, analysis the impact of motivations on M&A premium, then put forward corresponding hypothesis and build a model. Finally, Collect related information and data of M&A events occurred in the Shanghai Stock Exchange between 2010 and 2014, use the method of multiple linear regression to verify the theory of the proposed hypothesis.This paper uses document analysis method, standard research method,and empirical research method, analyzes the effects of Mergers and Acquisitions motivation on premiums. Comes to a conclusion:diversify acquisitions, the size of target company have a negative correlation between M&A premium; the proportion of the top 10 shareholders, get the control power have a positive correlation between M&A premium, that is to say, of the M&A motivations, diversify acquisitions to spread risk, agent motivation, manegement of self-interest motivation and get the control power to gain binifit for themselvs have impacts on M&A premium.