Empirical Research On The M&A Performance Of The Real Estate Listed Companies

Merger &Acquisition is an important way for capital market to allocate resources and enterprise to realize rapid expansion. Developed countries have gone through five waves of M&A, which proves that M&A is the only way for enterprise to develop and grow. In recent years, the activities of M&A have been increasing in quantity and scale. But can such active M&A really improve the performance of listed companies? Many scholars carry out related studies, but many researches have been made on M&A of all industries and few studies have been made on M&A of a certain industry. Since each industry has its unique characteristics, the performance of M&A can be very different.Real estate industry is one of the pillar industries of the national economy and M&A of the industry play an important role in China capital market. In terms of the industrial structure, China real estate industry has the characteristics of low market concentration, high debt ratio and large enterprise number. In terms of industrial properties, real estate industry is an capital intensive industry. Chinese government has strengthening macro control of real estate industry, increasing the difficulty of access to land resources and funds, which greatly improved market access threshold. M&A is becoming an effective way to optimize the industrial structure and resources. Therefore the study of M&A performance of real estate listed companies has both theoretical and practical value.The thesis is a combination of normative research and empirical research. This thesis selects M&A events of China real estate listed companies from 2010-2012 as the sample, evaluating long-term M&A performance through constructing financial index system. In terms of statistical method, this paper uses factor analysis to study long-term performance change of different annual samples from the previous year to the next two years. This paper also analysis the M&A performance trend from the terms of profitability ratio, solvency ratio, operating capacity ratio, growth capacity ratio and cash flow ratio.The empirical research find the following results. Firstly, in terms of comprehensive change trend, long-term M&A performance shows a trend from rise to decline. Long-term performance improves to a certain extant in M&A year, but starting to decrease one year after M&A. Secondly, in terms of positive rate, only half of the samples could improve performance in M&A year and more than half of the samples could not ameliorate its performance in the following two years after M&A events. Therefore the overall performance of the samples is unsatisfactory and M&A could not have a lasting positive effect on real estate listed companies. Thirdly, from the point of various financial index, the samples show varying degrees of deterioration in the aspect of profitability, solvency, operating capacity,growth capacity and cash flow.Finally this paper put forward some policy suggestions from the aspects of real estate company and government to improve M&A performance and regulate market.