Analysis Of Cross-board M&A Of Chinese Enterprise

With the accelerating promotion of the national economic structure transformation and the Go out Policy of enterprise, the pace of Chinese enterprise cross-border Merger & Acquisition (M&A) is speeding. As a consequence, both the amount of cross-border M&A and the number of enterprises involved grow rapidly. Thus, whether the performance of cross-border M&A is enhanced or not deserve in-depth study and analysis.In this thesis, we select the cross-border M&A events which happened among the public companies from 2010 to 2014. Financial index method and event study method are used to explore the performance of cross-border M&A from two dimensions of long-term performance and short-term performance. In the study of financial index method, this paper selects nine financial indicators located in corporate profitability, assets operation ability, debt paying ability and development ability, to analysis the operating performance (long-term performance). In the study of event study method, this paper calculates the daily average excess returns and the daily cumulative excess returns of the selected samples’stock, to analysis the trading performance (short-term performance). Empirical results show that:in the long term, rather than improve operating performance, cross-border M&A makes it down; in the short term, cross-border M&A indeed enhances the trading performance. In addition, factors as location choice, state ownership of enterprise, and the control on target enterprise, will affect both operating performance and trading performance. In terms of operating performance:enterprises enter into North American acquire the best performance, then Europe, enterprises enter into Oceania acquire the worst performance; the lower of state ownership and the higher of the control on target enterprise, the better performance enterprises will acquire. In terms of trading performance:enterprises enter into Oceania acquire the best performance, then Europe, enterprises enter into North American acquire the worst performance; the lower of state ownership and the higher of the control on target enterprise, the better performance enterprises will acquire. At last, this paper analyzes and summarizes some problems of cross-border M&A of Chinese enterprise, and puts forward the corresponding policy suggestions.