The Payment Methods And Performance Of China’s Listed Companies’ Mergers And Acquisitions

In the course of M&A transactions,the choice of payment methods has always been an important issue for both parties concerning.M&A payment refers to the payment method selected by the acquiring party to obtain the control right of the target company.The main contents include the cash payment method,the stock payment method,and the mixed payment method of cash and stock.The choice of payment method often relates to the successful completion of M&A transactions,and has an important influence on the future development of the company.Since 2013,a vigorous wave of mergers and acquisitions emerged in China quietly.In this wave of mergers and acquisitions,more and more listed companies have chosen to use company stocks as means of payment for mergers and acquisitions.According to our hand-searched mergers and acquisitions case,many listed companies acquire assets through the combination of issuing stocks and acquiring assets or issuing shares and paying cash.Why are listed companies in this wave of mergers and acquisitions so keen to issue assets through mergers and acquisitions? What factors affect the different ratios between the share-based payment and the cash payment? Moreover,through the combination of the issuance of shares and the payment of cash to acquire assets,does the different proportion between the share-based payment and the cash payment affect the M&A performance? Under the premise of continuous development of China’s capital market,it is of great practical significance to conduct in-depth research on these issues.This paper systematically elaborates the theory of financing ordering,market mispricing,and the theory of corporate control,and regards it as the theoretical foundation of the factors affecting the choice of payment methods.Further from the market signal perspective,risk sharing perspective,corporate governance perspective and tax avoidance perspective,the paper elaborates the theoretical mechanism of the effect of payment methods on M&A performance.Based on the above theoretical models and assumptions,the paper selected 534 cases of A-share listed companies from 2013 to 2017 as empirical research samples.The main conclusions of the study are:(1)The structure of corporate control rights significantly influences the choice of payment methods for mergers and acquisitions.When the control power of the first largest shareholder is unstable or relatively stable,the degree of equity restraint has a significant inhibitory effect on the stock payment method.When the control power of the largest shareholder is relatively stable,there is no such inhibitory effect.(2)There are market timing motives when the listed company chooses the acquisition and payment method.The higher the valuation of the listed company’s stock is,the more inclined the payment method of the listed company is to share payment.(3)The level of cash holdings of listed companies does not affect the necessary of payment methods for M&A.Listed companies will not consider their own cash holdings excessively when they choose the method of payment for mergers and acquisitions.(4)In the process of mergers and acquisitions and reorganizations,compared to cash payments,the sharebased payment method will bring positive accumulated excess returns to the shareholders of the listed company,that is,the performance of the merger and acquisition market for the share-based payment is better.This excellent performance is in the long-term and short-term.All have been reflected,that is to say,the performance of M&A market for share-based payment is better than cash payment.(5)In the M&A and reorganization process,the payment method has no significant effect on the changes in the operating performance of the listed company.That is to say,the choice of payment method has no relationship with the change of operating performance.This article is divided into eight chapters.The specific structure is as follows:The first chapter is the introduction.It mainly expounds the research background,research significance,concept definition,research methods,possible contribution and originality,and research framework and content structure arrangement.The second chapter describes the general situation of China’s listed M & A and M & A since 2013,and describes the selected payment methods of listed companies according to different sectors and industries and shareholders’ backgrounds.The third chapter describes the situation of M&A during 2013-2017 in the Chinese Capital Market.The forth chapter systematically elaborates the theory of financing ordering,market mispricing,and the theory of corporate control,and takes it as the theoretical foundation of the factors that influence the choice of payment methods.The fifth chapter expounds the theoretical mechanism of the effect of payment methods on M&A performance from the perspective of market signal display perspective,risk sharing perspective,corporate governance perspective,and tax avoidance perspective.The sixth chapter adopts a sample of 534 mergers and acquisitions reorganizations of A-share listed companies from 2013 to 2017 as an empirical research sample,and empirically examines the factors that influence the choice of merger and acquisition payment methods for listed companies.The seventh chapter adopts 310 mergers and acquisitions reorganization cases of Shanghai and Shenzhen A-share listed companies from 2013 to 2015 as an empirical sample.With the help of event research method and factor analysis method,this paper empirically tests the effect of M&A payment methods on M&A performance.The eighth chapter summarizes the full text and puts forward specific policy advice and suggestions on what kind of payment method China’s listed companies choose during mergers and acquisitions.