Examining The Performance Of Public Compangy Acquisitions Based On The Motive For The Acquisiton

Listed company M&A have been more common along with the development of the capital market. How to improve the performance of the listed company M&A, which is not only a very important problem in company performance for many scholars in different countries, but also a very important problem for the manger in the M&A activity. Different M&A motives can produce different M&A performances. The modern company corporate governance and the building rational M&A motive are the effective methods.This paper firstly analyzes the M&A motive and the M&A performance evaluation, then summarize the research actuality both at home and abroad.Using merger motives to partition the sample of acquisitions, I distinguish between value-enhancing mergers (conjectured as motivated by synergy) and value-reducing mergers (inferred as motivated by agency). These two merger sub-samples are then analyzed to study the long-term performance of the firms in each group. Results indicate that synergy-motivated acquisitions outperform agency-motivated acquisitions up to three years following the acquisition. Furthermore, I find that the best indicator of the motive for the acquisition is achieved by using a combination of the stock market reaction to the acquisition announcement and ex-ante accounting information. M&A motives cannot improve the performance of the listed company under the present capital market circumstance, but a method of getting rid of the economic distress. The short-term finance state improved, but the performance of the management letting down. Depending on the analyses of demonstration and aiming at the reason of the synergy cannot achieve, we propose that the external environment and M&A control should be strengthen to improve the M&A performances of listed company in our country.