The Research On M&A Performance Of State-owned Enterprises Under Government-led

In the current stage of development,China is dealing simultaneously with the slowdown in economic growth,making difficult structural adjustments,and absorbing the effects of previous economic stimulus policies.The domestic economic and industrial structure upgrade are facing enormous pressure.Under such background,it is of great strategic significance to deepen the reform and accelerate the merger and reorganization of state-owned enterprises.In order to carry out "the Belt and Road Initiatives" and "go global" strategy,the government is promoting megamerger between large central enterprises to enhance competitiveness in the international market,which had made a new wave of mergers and acquisitions.But not all of the government-led mergers and acquisitions are successful,there are many failed cases.Instead of good synergistic effect,M&A made the both companies even worse.So the rationality and effectiveness of government-led M&A has been criticized by the market.M&A is not only an important way for enterprises to gain competitive advantage,but also an important means for the government to adjust the economic structure,which has been highly valued by business executives and academics.The research on M&A motivation theory and performance analysis has been very mature by western scholars.However,the theoretical system can not fully explain the M&A behavior in Chinese market,especially under the government-led state-owned M&A.Compared with non-state-owned enterprises,SOE have their generality and particularity.The generality is reflected in that the SOE are the main body of market economy competition who pursuit profit maximum and ensure the value of state-owned assets.The particularity of state-owned enterprises is reflected in its social attributes.Under the socialist economic system,state-owned enterprises should take more responsibility for implementing the national economic policies and regulating the social and economic structure.For the national interests,SOE sometimes need to sacrifice their own economic interests.Therefore,in the study of M&A performance of state-owned enterprises,we should consider the special motives of state-owned enterprises and adopt special research methods of M&A performance on the basis of traditional M&A theory framework.However,the current M&A research of specialized state-owned enterprises is not enough.The existing research is still more focusing on the market view of the government-led M&A behavior analysis,which lacks of support for state-owned mergers and acquisitions unique theory,practice and integration research.With the case of M&A between CNR and CSR,this paper will put forward the special motive and performance research method,which is in line with the state-owned enterprise M&A from the perspective of the national macro-strategy and the industrial economic structure.This study has both theoretical and practical significance.The research on the particularity of state-owned M&A is a supplement and perfectation of the traditional theory system,which will provide strong theoretical support for the new round of M&A of state-owned enterprises.At the same time,the successful merger of CNR and CSR provide new ideas and methods to other state-owned enterprises which want to make M&A.The conclusions of this paper are as follows:(1)From the motivation of M&A of government-led state-owned enterprises,the government will and national strategy-oriented play a very important role,especially in the new round of state-owned enterprises reform.There is the market reason for the M&A of CNR and CSR.Through the merger,they can make a consolidation industry chain,reduce duplication of investment and reduce the direct effect of vicious competition.But the CNR and CSR are both in healthy condition,it is likely impossible to make them merge.For the international competition and national strategy of the comprehensive consideration,the government actively lead the merger in order to avoid more serious vicious competition between CNR and CSR in the "go global " strategy in the future.(2)As for the merger performance of the CNR and CSR,the merger is generally successful.In some ways it reflects the effects of mergers and acquisitions.From the market performance,in the short term,the M&A of CNR and CSR have received significant excess rate of return,respectively 101.24%,100.52%,much higher than the broader market gains over the same period.During the longer observation period,the BHAR value was always positive,indicating that the merger had a positive effect on the company and the capital market was optimistic about the merger.The improvement of financial performance during the merger was not significant,mainly because the merger time is short,the internal integration is not in place.The allocation of resources still need to be optimized,so it failed to reflect the good synergies.Before the M&A,CNR and CSR own healthy financial performance,so the merger bring the marginal improvement effect which was limited.Although the financial indicators are more difficult to see the improvement of mergers and acquisitions,some non-financial data can be seen to achieve the desired effect after the merger.In particular,the improvement of international status and competitiveness of the CRRC bring a large number of high-quality overseas orders,which enhance the international influence and make up for the decline in domestic maket.At the same time,CRRC help driving the excess capacity in steel,infrastructure,machinery and equipment industries export overseas.The successful merger of the CNR and CSR promote the pace of mergers and acquisitions of other state-owned enterprises,and play an important role in upgrading of China's economic and industrial structure.