Research On M&A Performance Of China's GEM Listed Companies

As the natural increase cannot meet the demand of leaping development,more and more small and medium-sized enterprises choose to develop and broaden business,enter a new market or increase their competitive advantages by means of mergers and acquisitions.As an important part of Chinese capital market,the Growth Enterprise Market(GEM)provides a favorable financing platform for small and medium-sized enterprises.Since the opening of GEM in the year 2009,high valuation of company value has brought high issue price of the shares,resulting in superfluous funds which are raised by new listed companies.The superfluous funds accelerate the mergers and acquisitions among the enterprises.Especially in recent years,a mass of mergers and acquisitions take place.In the background of economic transformation,it is necessary to study whether the mergers and acquisitions of the enterprises create values for the listed companies of GEMBased on the study of M & A performance made by former scholars at home and abroad,this paper aims to make a study of M & A performance of GEM’s mergers and acquisitions in line with its particularity.Firstly,this paper takes an overview of the development and M & A status.Then we take Shengyun Holdings that merged and acquired Beijing China Sciences General Energy & Environment Co,Ltd.(GEE)as an example,and make a study of its motivation and integration of the merger and acquisition based on the synergy theory,market power and efficiency theory.And we make an analysis of the M & A performance in both short term and long term by method of event study and accounting study.Lastly,we summarize the effective experiences and deficiencies of the M & A,in order to provide help for those listed companies of GEM that will make mergers and acquisitions.Finally,this paper comes into a conclusion: at first,the M & A has brought good performance in short term and long term,and the profitability,debt paying ability,operation capacity and development ability.Secondly,the success of the M & A derives from severe system of risk management and effective integration.And the synergistic effect between the two companies improves the values of both sides.The research conclusions will provide experiences support for both listed companies of GEM that are to make merger and acquisition and policy makers.