Research About The M&A Performance Of Listed Companies Based On Development Of Industry

In recent years, we have witnessed a more and more active in M & A (mergers and acquisitions)market in China, both from the increasing disclosure amounts of the transaction or the soaring number of cases, more and more listed companies completed M&A with the support of capital market. Successful M&A can bring companies management, financial and operating synergies and enhance their market competitiveness.From the microscopic point of view, M&A, as an important mean for corporate resource allocation, play an important role in the process of the development of enterprises; From the macro perspective, M&A, as an important mean both for the industrial structure adjustment of the nation and the reasonable allocation of resources, favors to improve the overall economic benefits. Although M&A can help companies achieve leapfrog development, but not all M&A can bring the expected benefits for enterprises, there also exists greater risk. Enterprises should choose proper methods and targets of M&A, with considerations of integrations of their own situation and the external environment. Due to the different industrial growth stages and growth potential, differences exists in the room for growth, enterprises which blindly expand the scale or diversify sometimes may not achieve the desired results. In order to get the best M& A results, it is better to choose different modes of M&A according to different industrial growth stages and growth potential.On the basis of comprehensive and in-depth study of related articles both in and out home, as well as M&A theory, industry life cycle theory and corporate strategic theory, this paper undertake empirical research, used the evaluation method of financial indicators, to analyze the M & A Performance of 80 listed companies in 2007 in China.To make research findings more guidance, this article divides the industries into three stages as growing, matured and declining stages and analyzes on the basis of classification, according to industry life cycle theory and different industrial growth stages. Empirical results show that industrial growth stages of certain corporate have an important impact on its performance of merger and acquisition.In the Growing industry, companies that undertake horizontal M&A performed best, followed by vertical M&A and mixed M& A. This was mainly due to the growing industry can provide enterprises with a broad market space and lower market concentration. Through horizontal M&A, companies can not only occupy a larger market share, but also develop economies of scale, which will further enhance the competitiveness of enterprises. In more mature industries, companies that undertake vertical M&A performed best, horizontal M&A and mixed M& A enhance business performance slightly, but not obvious. This is mainly because in the matured industry, the growth rate of industry is slowing down, the demand of the market is relatively saturated. The leading companies have occupied large market share, relying on the advantages such as brand, cost and channels, as a result of higher concentration of the market. Horizontal M&A at this time does not significantly improve performance of the company. Through vertical M&A, enable businesses to extend to both ends of industry chain which improve synergies, thereby enhance the competitiveness of enterprises.