Research On The Relationship Of M&A, Institutional Investor's Shareholding And M&A Performance

In China's current economic system,the state-owned economy dominates.Therefore,many listed companies in the capital market are derived from the former state-owned enterprise restructuring and developed into an organizational structure such as the parent company and its subsidiaries.The intricate economic interests between the parent and subsidiary companies have led to the frequent occurrence of related mergers and acquisitions.Associated mergers and acquisitions refer to mergers and acquisitions between listed companies controlled by the same major shareholder or between listed companies and major shareholders.Objectively speaking,related mergers and acquisitions are a special case of mergers and acquisitions.However,the related mergers and acquisitions in the M&A market,due to the incomplete independence of the parties,the information uncertainty obtained by the outsiders compared to the fair mergers and acquisitions.High,so the judgment of the value of the M&A company may be different from the fair acquisition under the same circumstances.So,what kind of value impact will the M&A event bring to the M&A? Based on China's national conditions,this paper hopes to explore a reasonable explanation for the phenomenon of mergers and acquisitions from the perspective of related mergers and acquisitions,and further examine the institutional investors as an external governance mechanism,whether to break the mergers and acquisitions in the enterprise-related M&A activities and enhance the value of the enterprise.This paper selects the event research method,and takes the non-financial listed company that completed the merger and reorganization of A-shares in China as a research sample in 2012-2017.The research finds that there is a negative correlation between the M&A of sample companies and the M&A performance of M&A companies during this time period.This means that affiliated mergers and acquisitions are prone to cause agency problems,while controllingshareholders and management have more M&A information than external market investors,resulting in information asymmetry.In order to avoid the derogation of investment income,external investors are more inclined to choose a negative voting method,which makes the market value of the M&A company decline.Further empirical tests found that when the institutional investors' shareholding ratio is high,the negative effect of the associated mergers and acquisitions on the market value of the M&A company is weakened.The impact of different types of institutional investors on corporate M&A performance is quite different.Compared with non-independent institutional investors,the independent influence of independent institutional investors on corporate M&A performance is more significant.This indicates that independent institutional investors can change their shareholding structure through their own shareholdings and participate in the decision-making of mergers and acquisitions companies,alleviate the internal and external information asymmetry of enterprises,and constrain the management and controlling shareholders to use the associated mergers and acquisitions to short-list listed companies,thereby reducing mergers and acquisitions.Derogation of the value of the business.Based on the above research conclusions,this paper proposes countermeasures from three aspects: government,listed companies and public investors.The government should promote the reform of the securities market system and the improvement of the law;listed companies should establish a good brand image and strengthen the internal governance mechanism of the company;public investors should pay attention to corporate information disclosure and make investment decisions based on relevant information obtained.The possible contribution of this research is to seek possible explanations for the phenomenon of corporate mergers and acquisitions,and to seek new evidence from heterogeneous institutional investors to break the profit and loss of mergers and acquisitions from the perspective of external governance of related mergers and acquisitions.