A Study On The Wealth Effect Of Listed Companies' M&A

Merger and acquisition is an important way for enterprises to achieve rapid expansion.In recent years,with the development of Chinese capital market,the M&A event of listed companies has been increasing year by year.The research on M&A's effect has become an important subject in different academic circles.The foreign scholars' study on M&A has begun at the mid-19th century,but today,there are still not formed a unified conclusion on whether the merger has brought wealth to shareholders or improve the performance of enterprises.After a lot of research,foreign scholars have found that cash flow,the method of M&A,the payment and other factors will have a certainly impact on the wealth effect of shareholders.With a large number of M&A activities emerged in China in the 1990s,domestic scholars have begun to research the M&A events.According to China's special political,economic system and the capital market environment,domestic scholars did some researches that foreign studies did not involve,such as the motive of M&A,they found that in the process of mergers and acquisitions,speculative mergers and government intervention accounted for a large proportion.On the influencing factors,they found that political relations,equity concentration will have a certain impact on the wealth of shareholders.The article is divided into five chapters:The first chapter puts forward the research background and research significance,briefly reviews the relevant literature review,and expounds the overall structure and research methods of the article.The second chapter introduces the related theories of M&A,including the concept and classification of M&A,the classification of M&A's motivations and the theoretical literature on the relationship between M&A and shareholder wealth.The third chapter analyzes the wealth effect of the shareholders in the M&A,selects the M&A cases from 2014 to 2016 as the overall research sample,takes china's three major industries(agriculture,industry and service industry)as the standard of different industries to divide the overall sample,use the event study to examine the whole sample and the three major industries' Cumulative Average Return before and after the M&A events respectively.Then measure the wealth of shareholders at M&A,and finally use the empirical results to explain the mystery of mergers and acquisitions.The fourth chapter is analyzing the influencing factors of the wealth effect on M&A shareholders of listed companies,tests the selected variables by constructing multiple regression models.Chapter five is the conclusion and suggestion.After the analysis of the previous chapters,the paper concludes that the occurrence of M&A can bring positive wealth effect to both shareholders of M&A,and the target companies' duration of the positive wealth effect is longer than the M&A companies.For both of the first industry-related industries' M&A company,the result is similar to the overall sample conclusion.The M&A event brings to the target company a positive wealth effect longer than the M&A company.From the secondary industry-based research on the relevant industries found that the occurrence of M&A did not give the acquisition of the company's positive wealth effect,but the target company shareholders obtain a positive wealth effect through mergers and acquisitions;for the relevant industries mergers and acquisitions in the tertiary industry,the M&A shareholders received significant positive excess CAR before the announcement,and the excess CAR after the M&A announcement was not significant,it indicating that we can not judge whether the M&A brought wealth effect for shareholders,and the target companies' has been brought a negative wealth effect,related acquisition,connected transaction and mergers and acquisitions with cash payment can bring greater wealth to the shareholders of the company.Finally,based on the above conclusions giving some suggestions,hoping to provide some reference for the business operators.