Research On The Relationship Between The M&A Payment Premium And M&A Performance Of Listed Companies

In recent years,China's Merger & Acquisition(M&A)market is in full swing,more and more enterprises are choosing M&A to realize their strategic objectives,and this trend will keep stable,because in the context of “one belt and one road”,and the reform of mixed ownership of state-owned enterprises,enterprises faced with fierce competition can choose M&A to occupy the market position and enter emerging industry quickly.Along with the merger boom,high premium mergers are common.Some people may doubt that assets acquired at a high premium are really in high quality and can really bring value improvement? Under such a background,this paper studied the performance feedback of M&A premium of listed companies.In this paper,we select 544 M&A events in China's A-share market from 2011 to2013 as the research object.First of all,related literature and theories are summarized in this paper,and on the basis of the result,future research area in this problem is outlined.Then,the influence of M&A premium on M&A performance is analyzed theoretically,and we further studied the influence under different property right and financing constraints,and raise the hypothesis.In the next,we use correlation analysis and multivariate regression to analysis the influence of M&A premium on M&A performance.Finally,suggestions are put forward based on the empirical results of the paper,and the deficiency in present research and the development are stated.The results are as follows:(1)there is a positive relationship between the acquisition premium and post-merger performance.The acquisition premium can represents merger synergy to a certain extent,the higher the premium paid represents the greater the synergy effect,therefore,the enterprise performance will become better and better after the merger.(2)When we distinguish the property rights of the enterprise,we find that the acquisition premium can improve the performance of M&A in non-state-owned enterprises,but this relationship is not significant in state-owned enterprises,further studies shows that acquisition made within state-owned enterprises are common,and in this situation the relationship between premium and performance is not significant,this indicates that State-owned enterprises undertake certain political tasks and can't pursuit of synergies.(3)When we grouped by financing constraints,we find that in the case of financing constraints the acquisition premium is positively correlated with corporate M&A performance,and this relationship is not significant under non-financing constraints,this partlyexplains the theory of free cash flow,the existence of financing constraint restricts the abuse of cash flow by managers and avoid overpayment,so the premium paid is more reasonable and can represents the size of synergistic effect under the financing constraints.Based on the findings of this paper,we recommend the following:(1)Companies should carefully evaluate the value of the target company and the expectation of synergistic effect before the merger.(2)Investors should take a rational view of the premium paid by state-owned enterprises in mergers and acquisitions.(3)Improve corporate governance,reduce agency costs,and prompt the company to pay a reasonable premium.