The Empirical Research On M&A And Restructuring Announcement Effect Of Short-term And Medium-term Stock Return Of Listed Companies’ In China

Mergers, acquisitions and restructurings of listed companies havebeen the hot spots of the countries on the securities market, and haveincreasingly become the major function of the securities marketallocation of resources and corporate strategic transformation. For listedcompanies involved in mergers, acquisitions and restructurings, it iswondered how the value of the mergers and acquisitions can be affected.Based on this starting point, using the event study, the article analyzes thestock returns of short-term and medium-term of listed companies.This article is divided into five parts. The first introduces thebackground, significance and motives of merger, acquisitions andrestructurings. The second part is the literature review, reviewing theimportant literature on merger, acquisitions and restructurings at homeand abroad. The third part includes the research model and empiricalmethods. The fourth part focuses on the event analysis of the empiricalanalysis, including the overall sample, sub-samples of both M&A sides,as well as the other sub-samples. The fifth part is the conclusion, and according to the conclusions the article makes some suggestions to theregulatory bodies, listed companies and investors.After screening the overall361samples in2010involved inmerger, acquisitions and restructurings, and the article draws from theanalysis: for Chinese listed companies involved in mergers, acquisitionsand restructurings,11trading days,6trading days and even one day priorto the announcement the shareholder gets statistically significant positivecumulative abnormal return (CAR). Even for the target company, thetime period shortens to15trading days. We can conclude that beforeannouncement, the news leaked in advance, and some investorsparticipated in insider trading, but the cumulative abnormal return doesnot exceed2%. Secondly, there are strong negative effects of Chineselisted companies involved in mergers, acquisitions and restructurings inthe day of the announcement date, the cumulative abnormal return CAR[0,0] is significantly negative of-0.35%. During the short-term period,the cumulative abnormal return CAR [0,15] significantly negative of-2.41%. During the medium-term period,90days after cumulativeabnormal return CAR [0,90] significantly negative of-8.15%. Finally, toconsider both sides involved in mergers, acquisitions and restructurings,the cumulative abnormal return of the short and medium term of thetarget company fell much more than the acquired company, and it issignificantly negative at the1%level.