The M&A Performance Research On China City Gas Industry

China’s city gas industry has been developing very quickly in recent years,featuring the existence of both monopolization and competitions.The upper and middle stream of the supply chain in the industry are controlled by the three monopolists and regional gas pipeline operators,while the downstream is segmented.It is commonly seen that China’s city gas companies keep growing through M&A.After more than a decade of M&A and market restructuring,the industry’s concentration level has been remarkably promoted while there are still many opportunities for future M&A.This thesis,with the above background in mind,selects an important M&A case,where China Gas acquired Fortune Gas,in order to study the performance.It reviews and summarizes relevant theories,analyzes the industry,companies,motivation,methods and process of the case,checks the M&A performance,and makes some recommendations and ideas.The thesis uses event study method to fathom the short term performance,through the calculation on price fluctuation and cumulative abnormal return,proving that the share holders’ wealth was promoted due to the acquisition.It also applies financial index method to the research on long term performance,following the steps to set up an evaluation system of financial index,adopt factor analysis as a tool and build a model to calculate the common factor and comprehensive result,quantitatively showing that the positive long term performance also accrued with the acquisition.China Gas,through the acquisition realized market position strengthening,value chain optimization,synergy effects with complementary advantages,and operation performance growth.