The Empirical Research On M&A Performance Of Real Estate Companies Listed In A-stock Market

As more and more M&A(Mergers and Acquisitions) occurred under real estate industry, survey and analysis on M&A performance and its impact factors keeps hot in both academics and the general public. In this paper, there are 274 M&A samples which have been done by real estate companies from 2000 to 2012, those companies are listed in China A stock market. Accounting study method the major solution for this study. Empirical research of this paper started with selecting 5 aspects including 14 financial indicators of each sample in four different periods, which are the year before M&A, the year M&A was conducted, the first year after M&A, and the second year after M&A, respectively. Then, after factor analysis via SPSS software was done, the performance score of each sample in each period was calculated. Observation on the changes of average performance in the four consecutive years was followed. The logic of second part of Empirical research was as following: let the performance score as the dependent variable, and selected 10 factors based on 3 aspects, which were the industry, M&A event and the company respectively, as independent variables. In order to understand what were the factors affecting the M&A performance of listed real estate companies during different period, and to find out certain factor was positive or negative correlation with the performance. The paper use Two Stage Least Squares as analyzing tool. What's more, the paper not only focus on the real estate industry, but also classify the industry into two subclassification, one include top 20 real estate companies, which were called good performers in this paper, the other were called poor performers. The paper tried to illustrate the difference between this two types of companies in the same industry.The empirical results illustrated that the industry average M&A performance in different years of listed real estate company were close to zero, but the changes were significant. The M&A performance in the year of M&A dropped significantly compared with the year before M&A, but the M&A performance rebounded back to the same level in the first year after the M&A, and the performance increased slightly in the second year after M&A.Based on the analysis of factors impacted M&A performance, it showed that both the share proportion of top ten shareholders and the share proportion of institutional shareholding had significant positive correlations with the M&A performance, which means that the higher the share proportion of the top ten shareholders, or the more institutional shareholding proportion, the better the performance.In summary, this study was based on financial indicator method, used factor analysis and Two Stage Least Squares analysis, described the changes of M&A performance before and after M&A events, found out certain factor influence the changes, provided a basic reference for the decision of M&A in real estate industry.