A Study On The Motive And Performance Of M&A By China's Listed Companies

In China,merger and acquisition(M&A)is based on the development of capital markets.The structure of corporate ownership and the maturity of capital markets in China are still way behind the ones in western countries.In spite of many documents available about motivation of merger and acquisition as well as mergers and acquisitions performance contributed by the study of merger and acquisition(M&A)among Chinese academic community,direct copy of western M&A theory could cause a confusion to current M&A in China.By observing the angle of free cash flow,however,the essence of M&A activities among Chinese companies and certain connections between the activities and Chinese macroeconomic environment could be discovered?This essay is from the angle of free cash flow to analyze the M&A motivation and M&A performance among Chinese public companies.After collecting and sorting many domestic and overseas documents,free cash flow and current situations of local free cash flow could be theoretically analyzed.As well as this,industrial connection and companies' self-needs also could be concluded.In the part of M&A performance,the connection between free cash flow and M&A is verified by looking into Chinese companies'nature of property right and growth rate.In the aspect of demonstration,samples of M&A companies between 2009 to 2011 are selected.Based on the utility of data of free cash flow,the research of M&A motivation and M&A performance is performed.By doing this,the connection between M&A motivation(the industrial connection,updated information of senior manager)and free cash flow is thus found.In the aspect of M&A performance,on the condition of different growth,a negative correlation between the use of free cash flow and M&A performance is formed.However,the correlation will not form in high growth rate companies.In different properties of companies,the differences between free cash flow and M&A performance are none,for example,the performance between the state owned companies and private ones is no different.All assumptions are based on the analysis of the data from CSMAR database by using STATA14 a statistical software is capable of applying on analysis of regression on index.All the statements and demonstration listed are to perform certain suggestions that the owners and the manager in public companies with different properties and growth rate could affect on free cash flow and some areas.Hopefully,all the suggestions could help and benefit in the management of M&A market,companies cash flow and future development.