| Since 1993, more and more Chinese listing companies have got involved in Merger & Acquisitions (M&A). Did these M&A really help to improve the quality of those operations, or are they simply a kind of zero-sum games in the capital market? Did the M&As promoted by the industry re-construction policies achieve their anticipated goal? As a result, it is necessary to make certain assessment against the result of these M&As. Since the wave of M&A came in 1993, such issue has drawn attentions of many companies and academics. They divided the M&A business by different ways, and analyzed the result of M&A in different dimensions. Unfortunately, their conclusions are usually various. There are two standard by which the former studies divided M&As: one is "operational", by which the M&As could be divided into Vertical, Horizontal, and Mixed ones; the other is "transactional", by which the M&As could be divided into Assets Recombination, Assets Exchange, Acquisition, Peeling off, etc. In the former studies, little attention was put on the industry related factors. This article is trying to divide M&As, by their industry nature, into Within Industry (WI) and Across Industry (AI) ones, and focused on the result of AI M&As in which listing companies were acquired by outsiders of their industry. This article concluded the reasons and attributes of AI M&As, used financial ratios and Equity Price Abnormal Return Method to study their result, and made comparisons between AI and other types of M&As, AI and WI, as well as transactionally different AI. In conclusion, the result of WI is generally better than that of AI, for both financial numbers and the reactions of the capital market. However, crossing industry is not the reason behind it. One proof is that, when a finance and investment company acquired a listing company, the stock price of the listing company reported well, although the operational result of this company did not improve much, if considering its long-term financial ratios. Another proof is that when a state-owned enterprise acquired a listing company across industry, the issue would not attract the interest of the capital market, although the operational results did improve. In this article, the first part discussed the background and import of the study, the second part reviewed some theories regarding AI M&A, the third part concluded the attributes of M&A among Chinese listing companies, the forth part analyzed the particular reasons of AI M&As for Chinese listing companies, the fifth part concluded the study approaches and their results regarding AI M&As, the sixth part presented the study approach and model of this article, the seventh part revealed the process of empirical analysis and the results, the eighth part drew the conclusion, and finally, the ninth part presented some thoughts and hints on the government policy making and enterprise decision making. |
