Empirical Study On Foreign Mergers And Acquisitions' Influence To The Target Company's Performance

In Recent years , Cross-border Merger and acquisitions have become a major mode of Foreign Direct Investment and an important approach to enterprises' development .Along With Economic globalization, China's entry into WTO, Polices appearing on foreign M&As and so on, there are more and more foreign M&As in China's capital market. But does foreign M & As really improve the performances of target companies? As to this question, this paper makes empirical studys on the performances of China's target companies.This paper firstly reviews theories of M&A motivation and operation performance, theories of intemational M&A motivation and operation performance, and relevant empirical results. In the part of empirical research, this paper collects 37 foreign M&As samples from 1996 to 2004, selects 13 finance norm reflecting the companies' performance, and by using employs Factor analysis and pared sample T Test, do researches on target companies' performance within four years. The result shows :The performance of foreign M&As of China's target companies rises and then falls: the performance of the same year in the M & As grows better than that of the previous year, but the performance of the first year after M & As and the performance of the second year are worse than that of the same year in the M&As. The trend is that the performance after M&As restores the previous years.In all, foreign M&As improves the performance of the target companies, but it isn't remarkable in statistics. This explains that foreign M&As does not remarkably influence the performance of the target companies.Horizontal M&As are superior to Conglomerate M&As, and the tendency of the performance of the Horizontal M &As is opposite to Conglomerate M &As. The performance of the Horizontal M &As rises and then falls, but the performance of conglomerate M & As falls and then rises.In the last, based on the analysis of empirical study, this paper puts forward a series of measures and suggestions.