M & A Performance Study

In recent years, many serious economic problems such as peasant workers shortage, technical workers shortage, oil shortage, coal shortage, constantly occurred. All kinds of signs show that the condition of cheap "processing plant" of the world in our country is hard to hold out for a long time. Various evidences show that the traditional extensive type growth method has already come to an end. Under this background, a new business enterprise reorganization which in order to cut down the cost will occur among many business enterprises. There are several reasons:The first factor is the macro-economics. The economy all around the world slows down in a different degree. But the economic growth rate in China is still so high. The high economic growth rate attracts numerous investors of the world.The second factor is the market competition. After 20 years of the market reform, various market industries have already turned into an intensive competition stage. Facing the vigorous market competition, the business enterprises will carry out M&A to cut down the cost and to scatter risks.The third factor is the high rise of our country private enterprises. The private capital economy will become a more and more strong economic strength in the Chinese economy. This strong economic strength presents a huge vires in which many malpractices of state-owned business enterprise and takes on an important role in Chinese economy. With the latest emendation ordination of the《Securities law》and《company law》in our country on January 1, 2006, the 30% procurement exemption threshold to private capital economy which wants to procure will bring a new M&A trend.Whether the M&A among business enterprises brings any conjunction effect as people expect? What causes will lead to an M&A and which factors take on a decisive function in M&A?...