Motivation Foreign Mergers And Acquisitions Of Listed Companies In China And The Enterprise Value Of Empirical Research

Since 1990's, a outstanding characteristic of the economic globalization was thatthe transnational merger and acquisitions (M&A) increased fast, and has alreadybecome the major form of trans-corporation's direct investment abroad. According tothe commitment that our country joins WTO, the restrictions of institutional factors toforeign capitals in aspects such as trade and area have been unlocked progressively. Inrecent years, as to foreign capitals merging the listed company, the activity is day byday active, the scale is expanding constantly, and the field involved in has becomingwider and wider, which have already had a great impact on development of theeconomy of our country. At present, this phenomenon has already caused the extensiveconcern of academic circles.But the questions about the relationship between themotives of foreign capitals merging the listed companies and the value of targetenterprises havn't been concentrated studied. This paper regards this problem as the clueand important content of its research, on the existing research results foundation at homeand abroad.At the first, after having explained western countries' M&A theories and theclassification of M&A motives, this paper analyze the motives of M&A out of whichforeign capitals merge our listed companies, and splits them into strategic motive,speculative motive, strategic-speculative motive and speculative-strategic motive. Onthis basis, with a statistical method, analyzes M&A motives of 57 cases happened inChina from 1995 to 2004. The result reveals, in that period of time, for overwhelmingmajority (account for 92.98%) foreign capitals among those cases, the M&A motivesare strategic, such as to enter and capture Chinese market more fast than theircompetitive rivals, to obtain the advantages of Chinese labor cost, to utilizestrategically important resources of Chinese listed companies, etc. And only little aportion (account for 7.02%) is out of speculative motive, or in part, such as of obtainingthe financing platform, of second arbitrage, of in disguised form of realty management,of underestimating the value of target enterprise, etc. According to route of realizing "maximization of enterprise value" refined fromthe discount models of enterprise's value, this paper constructs a index system forempirical analysis and analyzes the value of 22 target enterprises among those case offoreign capitals merged our country's listed companies from 2001 to 2003 with themethod of global principal component analysis. The result reveals that, on the whole, inthe merging year, enterprise's value has sharply reduced, after merging, fall after rising.In order to observe correlation of M&A motives of merging side's and value oftarget enterprises, this paper proposes supposing: there are normal correlations betweenvalue of target enterprise and the strategic motive, but negative correlation betweenvalue of target enterprise and the speculative motive. This paper comes to theconclusion: (1) M&A out of strategic motive can improve the production andmanagement of target listed companies and make its value added. It is said that there aresome normal correlations between value of target enterprise and the strategic motive.(2) There are negative correlations between value of target enterprise and speculativemotive and close speculative motive.The government of china should establish the corresponding supervision system byestablishing and perfecting the legislation of the Foreign Capital M&A, define furtherthe scope of industrial access and develop the Chinese propriety market to regulate thebehaviors of M&A by Foreign Capital. In addition, the domestic enterprises shouldknow clear their own advantages and disadvantages, then choose strategically theirforeign investor and try their best to create better conditions for negotiations in order tomake more win-win strategic M&A and less speculative acquisition.