The Performance Study Of Merged Listed Companies In China

Along with the step of economy integration, corporation merger and acquisition havespeeded up the capital accumulation in the world, and in China Corporation M & A haveprogressed in a rapid rate from 1997, which exceeds the IPO to be the largest part of resourceconfiguration in the security business. The performance of M & A should be known clearly, it isbeneficial to decision-making, legislation and supervision.We use the methodology of both event studies and "T-statistic" to measure the cumulativeaverage abnormal returns and their statistical significance. Our sample consists of 302 mergersand acquisitions in the listed firms from January 2004 to December 2005. In order to know howthe different firms, methods of M & A and the industry of M & A affect the performance, weexamine these sub samples. The result of all the samples suggests M & A event create value forthe shareholder of the firms. Which mean there are large sources of efficiency increasing,diversified management, synergistic effect of operation and finance in china.The result of all the sub samples suggest: target firm shareholders enjoy returns that aresignificantly and materially positive, but returns of buyer firms are essentially zero; shareholdersenjoy significant and material returns when the object of an acquisition is stock equity but assetshave not the same result; different industry can be different result, shareholders of real estategain CARs about 14.27%, commerce and public utility suffer an average loss, synthesis andmanufacturing not more than 3%.The findings show that we should have the concept to encourage and induct M & A activitiescreate more value for the whole society. Market environment should be founded, the competitionshould be strengthening in the acquiring company, corporate governance and disclosure shouldbe improved, and the management should be enhanced.