Wealth Effect Analysis Of China Banking And Insurance M&A

With the continuous development of financial integration and the gradual release of policy dividends,the banking and insurance industries are breaking through the original boundaries of sub-industry operation and moving towards mixed operation.Under the impact of five large-scale mergers and acquisitions,the banking and insurance industry has not satisfied the original basic cooperation model,and the banking and insurance merger has entered the historical stage.As an important sector of the existing financial system,mergers and acquisitions between insurance and banking are of great significance to China’s financial market.However,whether banking and insurance M&A activities can achieve positive wealth effects is an important issue that needs to be confirmed at present.Based on the theory related to banking and insurance M&A,this paper takes the banking and insurance M&A activities that occurred in China from 2009 to 2019 as a research sample,analyzes the short-term wealth effect of banking and insurance M&A in China using the event research method,and studies the wealth effect of banking and insurance M&A in combination with the principal component analysis method.In the short term,due to the lack of market maturity and external factors such as false information and information leakage,the banking and insurance M&A incident reduced the wealth of the shareholders of the acquirer,and it was found that the significant difference in the wealth effect of the bancassurance M&A was related to the financial status of the two parties in the year of the merger.In addition,this paper uses the BHAR model to study the long-term wealth effect of banking and insurance M&A in China,and in the long run,banking and insurance M&A events have not brought wealth effects to the shareholders of the acquirer.This paper analyzes the classic banking and insurance M&A case of Ping An of China acquisition of Shenzhen Development bank.In the short term,the M&A activities did not affect the wealth effect of Ping An of China,but in the long run,Ping An of China obtained a significant wealth effect.Combined with the overall sample and the present case,the result of the insurance company’s merger with the bank is better than the bank’s acquisition of the insurance company.Based on the research conclusions,this paper gives suggestions to the participants in bancassurance mergers and acquisitions: ordinary investors should pursue long-term returns and reject short-term speculation;the managers of the mergers and acquisitions should have more effective means of resource integration and pay attention to the information leakage of mergers and acquisitions;regulators need to improve the laws and regulations of the capital market and increase support for mergers and acquisitions in the insurance industry.