Research On Merger And Acquisition Performance Of Manufacturing Listed Companies Based On Free Cash Flow

With China's economic development entering a new normal,accelerating the transformation of the mode of economic development is the top priority of the current economic work.As a pillar industry of our country,the task of eliminating backward production capacity and upgrading is arduous.Mergers and acquisitions(M&A)as an important way to promote the manufacturing industry to the middle and high end,whether it can achieve the goal of value creation and resolve the industrial dilemma has attracted much attention.Taking 68 A-share Manufacturing Listed Companies in Shanghai and Shenzhen as samples,which implemented M&A transactions in China from 2013 to 2014,this paper considers that free cash flow is the residual cash flow that is really enjoyed by shareholders after meeting the requirements of daily operation and development of enterprises,avoiding the possible earnings management problems in traditional profit indicators,and reflecting the operating results of enterprises more comprehensively and comprehensively.Therefore,this paper chooses a series of financial indicators based on free cash flow,and uses factor analysis to evaluate the M&A activities of listed manufacturing companies.The results show that manufacturing listed companies can not achieve long-term performance growth through M&A activities,and M&A can not achieve the desired results.The performance of three years after M&A is matched with that of one year before M&A.The results further prove that M&A activities have no significant impact on the performance of manufacturing listed companies.Secondly,although the surplus of free cash flow can show the good operating condition of enterprises,the excessive existence of free cash flow will lead to irrational mergers and acquisitions.At the same time,under the background of the separation of two rights in modern enterprises,it will further intensify the competition between managers and owners for the residual control of free cash flow.Therefore,this paper combines the corporate governance environment to explore the free cash flow to make a regression analysis of the M&A performance of manufacturing listed companies.The results show that free cash flow is negatively correlated with M&A performance.Considering the influence of different control rights of managers and owners,giving managers appropriate equity incentives can alleviate the negative correlation between free cash flow and M&A performance.Relative concentration of equity can alleviate the agency problem of free cash flow.