Research On Characteristics Of Ultimate Controlling Shareholder Of Acquiring Company And Performance Of M&A

M&A are the eternal subject of the capital market. Originally, it is a way to optimize resources disposition of listed companies, readjustment economic structure and realize industry upgrading. But now, many controlling shareholders tunnel listed companies through related party transactions etc. and invade the interests of the minority shareholders after M&A as the administrative monopoly of the listed system, the controlling status of the largest shareholders and the deficiency of legal system to protect minority shareholders which constrains the development of our capital market seriously. These M&A neither perfects the capital structure of acquiring firms and improves the quality of assets, nor enhances the performance of M&A. What's worse, the performances of the companies drop down after M&A. On the other hand, the controlling shareholders not only will tunnel the companies, they also will propping the companies, especially when the controlled companies find themselves in an awkward finance predicament. The tunneling and propping are symmetric. Sometimes, controlling shareholders transport the benefit out from the controlled companies and sometimes controlling shareholders transport benefit into the controlled companies. These benefit transfer after M&A makes great effects to the performance of the acquiring firms.The present literatures about M&A performance are mostly base on traditional corporate governance theory, in which the ownership structure is scattered. However, the reality of companies does not meet the traditional management theory. In fact, the ownership structures in most countries or districts are relatively centralized. Because of the unique system background of our capital markets, the decision on M&A performance analysis of the traditional framework and approach doesn't prove itself useful any more, or at least not fully reveal its Performance. Therefore, to search for an economic hypothesis to explain the performance of our listed companied which is more compliable to the real governance features (mainly in the control of controlling shareholders), and to test it by using empirical data as to make an objective and comprehensive assessment of the M&A performance in China's capital market, is not only deepening the theoretical and empirical studies on the academic value, but also helps to guide decision-making and optimize the economic stakeholders in a practical sense.Based on China's capital market in the ownership structure and control system and other special background, the new train of the analysis of M&A of listed companies in China that based on the analysis of the characteristics of the ultimate shareholder is built in this dissertation. This dissertation classifies the M&A controlled by ultimate shareholders into three kinds: Tunneling M&A, Propping M&A and others. The new analysis framework begins from the relationship between the characteristics of the ultimate shareholder and the benefit-transfer after M&A, then analyses the influence of benefit-transfer on M&A performance, followed by the analysis of the relationship between the ultimate shareholder and the M&A performance. In this way, empirical data on the use of China's securities market, using factor analysis, regressing analysis etc., such as statistical analysis of M&A in the companies'overall performance before and after the change, and control characteristics and the relationship between changes in overall performance, the system proved. The innovative research results mainly are:1. Tunneling M&A will reduce the perfprmance of M&A and this influence will grow in future; not all of Propping M&A will increase the perfprmance of M&A, such as Propping M&A under the purpose of maintaining the listing status of controlled listed companies and qualification for rights issues; substantial Propping M&A will increase the perfprmance of M&A and this influence will be weakend in future;2. The characteristics of ultimate shareholders influence the purpose of controlling the M&A;3. The characteristics of ultimate shareholders influence the perfprmance of M&A, and these effects will change in future. Especially, sound law environment will restrain the unfavorable benefit-transfer, which impels listed companies to carry out favorable benefit-transfer in order to increase the perfprmance of M&A.