M&A Motives: The Value Of Corporate Control

According to the international experience, M&A has been one of the most important paths for corporate to quickly develop and expand large-scale. In China, the Stock's Dividing will be soon completed, and this will provide many new chances for M&A. So, more and more M&A will happen in the near future. At the same time, motives of M&A will also get people's more and more concerns.The first part of this paper, by defining M&A, introducing and making a simple comment on M&A motive theories, author makes a theoretical preparation for forthcoming discussion. After that, author analyzes the meaning, main sources and the influence factors of the value of corporate control in detail. Then discusses that pursuing the value of corporate control, especially pursuing private benefits, is the essential force for M&A. At last, author summaries and analyzes the method ofcalculating the value of corporate——premium price of corporate control and itsinfluence factors, and makes an empirical study with the ownership-transfer dates which are from listed- companies of A Share in China, to validate that the value of corporate control is the essential motive for M&A.This paper draws three main conclusions as following: (1)Study on the value of corporate control, especially private benefits, can announce the essential force for driving M&A, especially for transfer of corporate control. What is more, pursuing private benefits as the motive of M&A is good complement for existed M&A theories. (2) A great deal of research literatures express that controlling shareholders usurp minor shareholders is a common phenomenon. So pursuing the value of corporate control, especially private benefits, as the motive of M&A is not merely suitable for special ownership structure of Chinese listed companies and present condition of corporate governance. (3)In practice, because of the existence of the value of corporate control, both sides of M&A will have an anticipation about the value of corporate control, which directly decides the premium price of corporate control. The final premium price of corporate control will also affect the revenue and cost of M&A for both sides.