An Empirical Study On The Behavior And Performance Of M&A Of Chinese Listed Manufacturing Companies

Abstract:After the financial crisis, the developed countries launch a new round of the world’s manufacturing industrial restructuring, and the global manufacturing industry is facing a profound strategic restructuring. Affected by the wave of global mergers and acquisitions, China has also increased the integrated intensity of the manufacturing sector resources. China’s "Twelfth-Five-Year Plan"clearly pointed out that we should vigorously promote the adjustment and upgrade of manufacturing industrial structure, and actively encourage manufacturing companies to implement the merger and reorganization. China’s manufacturing industry M&A starting is late and the capital market is not yet mature, in the development process also exposed some problems.Therefore, this article studies on the performance of mergers and acquisitions of Chinese manufacturing industry, aimed at improving China’s M&A current situation of manufacture industry and international competitiveness of manufacturing companies, accelerate the transformation of China from a big manufacturing country to a grand manufacturing nation.This paper study the behavior of M&A of listed manufacturing companies in-depth, then selects listed manufacturing companies which have happened acquisition in2007as samples, by using the excess returns method and factor analysis method, study the long-short term performance of M&A of listed manufacturing companies from three dimensions of the M&A scale, industry relationships and affiliate relationships.This article is divided into five parts. First, defined the concepts of M&A, M&A activity and M&A performance, and described the agency theory, the theory of value and synergy theory which provide a theoretical basis for the following analysis of M&A activity. Secondly, based on the review of the M&A development process of the listed manufacturing companies, analysis the motives, purpose, behavioral characteristics and problems of M&A of Chinese listed manufacturing companies from2004to2010. Again, by using the excess returns method in the event of (-15,15),syudy the short-term market effects of M&A from three dimensions. Then, using factor analysis method, based on financial indicators of the sample companies from2004to2010, give an empirical study on the long-term operating efficiency of M&A of listed manufacturing companies Empirical results show that:Overall, in the short time M&A damage the value of company’s shareholder, but in the long term it improve company’s business performance. When we study M&A performance from different dimensions found that in the short-term the market effects of large-scale, horizontal and non-affiliate M&A is superior to other types of acquisitions, in the long-term the performance of small-scale, mixed and affiliate M&A is superior to other types of acquisitions.Finally, on the basis of the previous paper, aiming at the problems existing in M&A of Chinese listed manufacturing companies, put forward policy recommendations.