Research On M&A Premium Structure And Performance

In recent years,China's merge and acquisition(M&A)market presents a good steady rising trend.To actualize the strategic goals,more and more companies in China have involved in M&A through the developing domestic capital markets.With the upsurge of mergers and acquisitions,high premium has become the "new normal".In the premium rate is getting higher and higher,and even higher premium gradually become a merger,the high premium acquisition of assets for the listed companies can really bring higher value? In the market reports,many people questioned that the high premium acquisition phenomenon is not normal.In this context,based on China's current market environment and trading system,this paper explores the formation mechanism and performance feedback of M&A premium of Chinese listed companies.In this paper,the A-share listed companies that announce M&A transactions from 2011 to 2013 are taken as the research object.First of all,this paper combs the research literature and the theoretical basis of M&A premium and M&A performance at home and abroad.Secondly,according to the theoretical analysis of M&A premium structure-M&A premium mechanism-M&A premium performance,the research hypothesis is obtained.Thirdly,the Mann-Whitney U test in the non-parametric test is used to analyze whether there are differences in M&A premium under different M&A types and valuation methods.In the part of the performance of M&A premium,this paper studies the impact of M&A premium on M&A performance through multi-factor analysis,correlation analysis and multiple regression analysis.Finally,some suggestions are put forward based on the empirical results of this paper,and the shortcomings of the research and the prospect of further research are pointed out.The conclusions are as follows:(1)The diversification M&A premium is higher than the related M&A.The speculation and information asymmetry lead to diversification of different industries premium higher.(2)The income method valuation premium is higher than the asset-based approach.The two methods take different angles,and the income method has higher coverage of off-balance-sheet assets,and the valuation premium is often higher.(3)high premium does not necessarily bring high performance.The target company and expected synergies may be miscalculated.(4)In a related M&A,a high premium can lead to high performance.high premium buys a indeed high-quality assets which can produce higher performance.(5)In a diversified M&A,high premiums do not necessarily lead to high performance.Erroneous estimate on the value of the target company and the synergistic effect mainly exist in diversified mergers.(6)there is no absolute evaluation method that high premium assets will bring high performance.The implications of this paper are as follows:(1)Mergers and acquisitions managers need to set up correct M&A motivations from the perspective of organizational strategy,and focus on the possibility of achieving synergies.(2)the valuation agencies and valuers should carefully select the matching evaluation methods.Professional judgment needs data and logic support.(3)The regulatory authorities shall strengthen supervision over high-premium diversified mergers and acquisitions.(4)Investors should take a rational attitude towards M&A premium and make investment decisions based on whether M&A premium has actual performance.The new idea of this paper is as follows: From the perspective of research content,the existing research are mainly about the M&A motives or M&A trading characteristics.there are few studies on M&A premium from the perspective of premium valuation.This paper,from the perspective of valuation premium,not only provides new empirical evidence for this series of research,but also brings useful practical inspiration to the behavior of intermediary institutions in Chinese M&A market.From the view of research design,this paper carries out the theoretical analysis and empirical research along the research route of M&A premium structure analysis-M&A premium mechanism-M&A premium performance.The existing studies do not study the M&A premium from structural analysis to digestion mechanism to performance feedback.