The Empirical Analysis Of Synergy Of China's Listed Company

As an effective approach to adjust industrial structure and expand corporation running scale rapidly, merger and acquisition (M&A) has always been concern and use by listed companies. since 20th century 70 years, the synergy is the famous theory to explain M&A by financial economists. There is considerable research about it by domestic and foreign scholars; however, no unified conclusions have been obtained so far. With the increasing improvement and development of stock market growth, M&A activities of listed companies in China often occur, but the effect of mergers and acquisitions need to be further verified. This paper chose Shanghai Stock Exchange A share of enterprises as the study's entry point, examined the impact of synergy through the empirical study of mixed M&A cases of listed companies in China in 2007, and assessed the advantages and disadvantages.At the beginning, this paper reviewed and summarized the relevant research of the synergy of M&A at home and abroad, then details basic theory and calculation model of the synergy of M&A, and executed empirical analysis on the basis of the above content.First this paper used event study to examine the impact of M&A activities on short-term synergy of M&A of listed companies in China. In the empirical analysis, we chose Shanghai Stock Exchange A share of enterprises in China occurred mixed M&A transactions in 2007 as research samples, used the mean adjustment model to calculate the sample companies' cumulative abnormal returns(CAR) in the event period (-10,10), and judged whether the sample companies' shareholder wealth has increased through M&A activities. Then we used factor analysis to examine impact of M&A activities on long-term synergy of M&A of listed companies in China. According to relevant research, we selected 3 financial indicators which could reflect the synergy of M&A, namely three charges profit margins, earnings per share, net assets rate of return. We used SPSS software for data processing, and constructed evaluation function by the common factors extracted from the above 3 financial indicators using factor analysis. By comparing the difference of the scores before and after the M&A, we could judge whether the M&A significantly improved the long-term performance of listed companies in China.By the empirical research, this paper got the following conclusions:In the current market environment, in the short term M&A of listed companies have certain synergy, but in long term have no significant synergy, or even negative effects.