Research On Cross-border M&A Performance Of Chinese Banks Based On Market Value

Chinese-funded enterprises "go global" to speed up,and the process of internationalization of the renminbi is accelerating.The development of commercial banks in the domestic market has entered a era of meager profits,and more and more banks have turned their sights to overseas markets and set off another internationalization strategies.In general,developed countries not only have strong financial strength,leading technical means and management methods,but also have rich market experience.Therefore,the fastest way for China’s banking industry to enhance its competitiveness is to increase its scale through cross-border mergers and acquisitions,broaden its business scope,and increase its technical and managerial level,so as to gradually increase its strength and confidence to compete with foreign banks.Although Chinese commercial banks take part in cross-border mergers and acquisitions have become increasingly frequent and have achieved remarkable results,there are still many challenges during overseas mergers and acquisitions.For instance,Min Sheng Bank’s mergers and acquisitions with United Bank of America and Ping An Bank’s acquisition of the Fortis Group all eventually failed with the huge losses of the target banks.As for the overseas mergers and acquisitions of Chinese-funded banks,the factors influencing their success or failure are numerous and complex.Among them,the choice of acquisition targets is an important factor,and it has increasingly attracted people’s attention.This article collects cross-border mergers and acquisitions cases of Chinese banks since 2000 and sorts out the course and characteristics of cross-border mergers and acquisitions.In order to improve market value of Chinese banks,I want to explore which target banks should be chosen.The article discusses the causes of cross-border mergers and acquisitions from both macro and micro levels,and discusses the status of China’s commercial banks in selecting M&A regions and M&A targets based on the above reasons.From the perspective of M&A target selection,a summary of Chinese banks’ cross-border transactions is presented,including effectiveness and problems of M&A.At the same time,the event study was used to study the influence of the choice of different acquisition target regions and the differences in the M&A shares on the market value of the M&A parties,which objectively and concretely reflected the impact of the different M&A goals selected by Chinese commercial banks.Then a multiple regression model was established to conduct regression analysis on a number of factors that may affect market value.Finally,from the M&A target area and the target bank,they sum up the strategies for M&A target selection under Chinese banks’ different conditions and realities,providing reference suggestions for cross-border mergers and acquisitions by Chinese banks in the future.