Research On M&A Premium Factors About Rubinstein Bargaining Model

In the mergers and acquisitions process, because a lot of information asymmetry between the twosides, there is a transaction on the respective underlying value judgments very different, coupledwith different motivations M&M different bidders for acquisition of the subject matter has adifferent measure of value, Thus, most mergers and acquisitions by the two sides bargain deal agreedprices. Focus on China M&A market in2010, China-related M&A transactions accounted for10.0percent of global scale. Asia-Pacific region for the Chinese market is already Asia’s largest mergersand acquisitions market, accounting for23.0percent of total transactions in Asia, ahead of India,Russia, Brazil and the other three members of the "BRIC", indicating that China has entered themature M&A environment national ranks. Behind a series of mergers and acquisitions cases, thepremium merger mainstream results M&M’s core factors affect the premium have?In this paper, literature research scholars of previous research on mergers and acquisitionspremiums of the sort, collate and analyze the concepts related mergers and acquisitions premiumresearch, laying the groundwork for the launch of this study. By game theory bargaining theoryreview conducted hypothesis development and model construction, building information differencesaffect bargaining cost differences and government intervention in the three factors hypothesis andapplication of accounting research method to obtain data to verify the hypothesis; to verify themodel, statistical analysis using confirmatory factor analysis, correlation analysis, multipleregression analysis, to explore the influence and affect the level of relations between variables.Firstly, the mergers and acquisitions, M&A premium, negotiation and merger talks were combingthe literature were reviewed on the basis of previous research on M&A premium analyticalframework constructed under negotiation mode bargain background, based on the negotiations Bothsides can be observed both information and explicit cost impact on the enterprise marketmechanisms background and external institutional environment (government intervention) the roleof the three aspects of the theoretical literature review analysis.Secondly, this paper by means of negotiations Rubinstein model of both games thinking,compared Rubinstein model under complete and incomplete information situation, focusing on theimpact on the negotiating power Rubinstein model "discount factor" analyze, draw information andcosts are two factors that merger negotiations between the parties concerned and the main factorsaffect the outcome of the negotiations. With information and costs as the main research points todraw the transaction cost theory to explain the transaction costs, asymmetric information and assetsseparately from special factors such as the empirical variables, verify the theoretical assumptions ofthis article. The results showed that the merger talks bargaining mode, with the goal of completeinformation relative to business enterprises by virtue of information superiority in the bargaindominated improved premium level than the primary and acquisitions; in addition, the opportunitycost of the enterprise on behalf of the negotiations in different asset Specific degree differences playa significant role in the negotiations, the higher the degree of specificity of physical assets, withparty talks will get benefits, but on the contrary proprietary human capital and physical assetsProprietary degree, more representative, mergers and acquisitions Enterprises in the "people"Difference properties affect premium performance more critical level. From the information and the cost of two factors affect the weight, the regression coefficientssuggest that representatives of factors affecting the cost of a dedicated physical difference than theinformation asymmetry factor in the difference information, the difference between the cost ofacquisition opportunities described M&A business impact to the results of bargaining greater thanthe degree of information asymmetry. In other words, the bargaining results, their own informationthrough the bargaining process in the exchange of information so that information asymmetry reducethe impact on the bargaining results showed a decreasing trend, but the difference between the costof business as an important differentiator among companies, exhibit relatively solid-state resistance,with respect to information factors are important factors bargaining. These results showed that: dealprice formation, especially premium game results, reflects the fair transaction between subjects, inmergers and acquisitions activity in the market regulation also reflects the effectiveness of markettrading on the allocation of social resources.Finally, in China’s special institutional environment, the impact of government on the businessactivities is real, due to an imbalance of economic development Chinese provinces, different levelsof intervention of the regional government of the enterprise. Lizeng Quan, Yu Qian and Wangxiaokun (2005) to explain the traditional theory that the Anglo-American countries such as mergersand acquisitions practice (eg: synergies, agency costs or arrogant hypothesis, etc.) it is difficult tomake a reasonable explanation for the phenomenon of Chinese M&A market, in China’s Listedwhen the company’s M&A research, can not but consider the impact of controlling shareholders orlocal governments. Therefore, the role of government will be included in the merger betweenenterprises game, the use of "hawk-dove" game strategy model to analyze the impact of mergersand acquisitions in the government proposed and verified government intervention on the mergerpremium, research The results showed that: government intervention and negative merger premiumrate, M&A premium rate is lower than the same government under the jurisdiction of commongovernment. Even when the same government jurisdiction, whether bilateral relationship merger bythe degree of government intervention are different, related mergers and acquisitions less vulnerableto government intervention, the deal depends on the results of both the controlling shareholders, theirindifference in their overall earnings, and therefore to assess the price to complete the transaction.When its specific purpose, such as their control of listed companies to implement income transfer orinput, there will be positive and negative premium two situation. And not related acquisitions, thegovernment will intervene as a third party to intervene, because the special status of local listedcompanies in the local bargaining with government intervention will be biased towards listedcompanies, mergers and acquisitions of listed companies to tilt the premium income. Specificperformance of local state-owned listed company’s profit target companies, M&A premium ratesand government intervention and positive. Local state-owned loss-making companies listed as thetarget enterprises, government intervention and negative merger premium rate.After government intervention under the impact of M&A premium empirical analysis, the paperup to the perspective of policy options with a total marginal benefit society, government interventionand market selection policy options analysis, the sort of government intervention and marketregulation boundary problems for the government M&A-intervention provides a theoretical basis.Proposed merger transaction occurred within one country, region, the government should consider the comprehensive income arising from acquisitions, and can not stand a single main business, ortarget companies to measure, but the two sides should be M&A business is to achieve total revenuegrowth increase or reduce government intervention in mergers and acquisitions so that both sidesrealize the value of M&A business goal is to quantify the incremental policy choices. Governmentselection principles and egalitarian utilitarianism combining policy aspects of mergers andacquisitions between macro-economic control guidance to prevent mergers lead to monopoly, whilealso taking into account the interests of the disadvantaged business losses in merger negotiations.Inaddition, we also found that not only in the bargain intervention of government intervention, but alsoimplicitly intervention from the evaluation aspects of the transaction value of the subject matter.Compared with the existing literature, innovation and contribution of this paper is mainly reflectedin the following aspects:First, this article bargain price acquisition process as a starting point to build a simple merger talkswith M&A premium background Relationship Framework. In this framework and expand the mainbusiness and target corporate game analysis, research topics included the acquisition of the two sides.Most M&A premium of existing research studies are by the target company, the acquiring companyand transaction characteristics performed three aspects subdivision (Eckbo,2009). Conclusions arestanding single participants affect the angle of the M&A premium, under the Chinese M&Amarket in a negotiated the majority of transactions, conclusions can not fully explain China toproduce premium deal originally, but extends to the global M&A market on, in addition to thetender offer conducted on the developed capital markets, merger talks also one of the major mergersand acquisitions, M&A premium research paper expands horizons and make research more realisticM&A premium merger.Second, the majority of existing research and the use of variable primary target company’sbusiness or theoretical analysis and empirical. From the perspective of this article, the choice ofvariables, this paper from the perspective of the difference between enterprises of view, the firstattempt to influence the relationship between the game and the main trading business and the targetcompany into the variables analyzed theoretically and empirically. Factors influencing this articlecan help companies discover deficiencies before the merger implementation factors, on thetransaction price forecast for companies to reduce the frequency of negotiations, saving the cost ofproviding a theoretical basis for the negotiations.Third, concerned about the impact of government action on the M&A premium. In order to livein government intervention in business impact studies, the majority of M&A performance from theperspective of the study, results presumption pros and cons of government intervention, ignoring adecisive role on the performance of the enterprise itself. From the perspective of governmentintervention to study the behavior of corporate mergers and acquisitions. They implicitly assume thatthe local government of the region of intervention motivation and level of intervention is nodifference between business, government intervention in mergers and acquisitions activity willdepend on the characteristics of M&A business. In this paper, the behavior of the government in themerger selection factors included in the pricing of mergers and acquisitions, empirical test of thegovernment in terms of M&A premium of "tunneling" and "support" behavior, provides a newgovernment intervention in the Chinese M&A market, M&A premium impact direct evidence reveals the direct government intervention in the interests of transport behavior of listed companies.Political considerations goal difference intervention level of motivation and intervention of localgovernment enterprises, is one of the main factors affecting China’s local state-owned enterprisesmerger premium.Fourth, the current problem of Chinese enterprises, mostly advocating to reduce governmentintervention, transferring market selection, and no analysis of government intervention in theboundary question. This study showed that: in China M&A market, to give full attention to the roleof government to implement mergers and acquisitions, and proposed mergers and acquisitions in thegovernment policy in principle choice, choose utilitarian and egalitarian government depends on themanagement to maximize the total effect under boundary equilibrium.In addition, the paper due to internal dynamic business development point of view of mergers andacquisitions is the coupling results in the enterprise development to a certain extent when theexternal environment.M&A business in terms of participation, study results showed that the merger negotiations to getmore advantages, the main and companies to reduce the premium paid, or the target company formore premium income, in the bargain this game, first, you need to Participants focus on M&Aactivity on the one hand to gather information and make their own dominant enterprise information;second, the long-term development of enterprises in terms of absorption, cultivate outstandingmanagement, operations personnel will make competition in the market long dominated, gaincompetitive advantage is the company’s core capabilities in M&A transactions will be fundamentalto get more premium income.From the government point of view, the results show that the loss of government intervention tothe target company had a "benefit" transfer. Mergers and acquisitions in the government asstakeholders, plays an important role in the allocation of resources and the governmentmacro-control self-interest get in M&A. Blindly to loss-making enterprises "transfer of benefits",and can not achieve effective allocation of social resources to achieve the expansion of the totalsocial welfare.From the government point of view, the results show that the loss of government intervention tothe target company had a "benefit" delivery. Government, as the merger of the stakeholders, plays animportant role in the allocation of resources and the government macro-control self-interest get inMergers and Acquisitions. Blindly to loss-making enterprises,"the transfer of benefits", and cannotachieve effective allocation of social resources, to achieve the expansion of the total social welfare.