Research On Three Methods Selection Of M&a Of Listed Companies Based On The Industry Life Cycle

In this article, we research the performance of enterprises in the differentstages of production cycle through empirical analysis in order to identifywhich sort of M&A we choose can get better company’s performanceimproved for each stage of industry life cycle.In this article, firstly we introduce the concepts of mergers andacquisitions and some related theories, and then introduce the methods ofresearch M&A performance of corporate and concepts of industry life cycle.Besides we support the hypothesis of a possible link between the differentstages of industry life cycle and different types of corporate mergers andacquisitions. Next, we establish evaluation system of M&A performance forlisted companies in China; we set five dimensions,10indicators. We collectthe finance data from2003to2011years of corporate that corresponds to the430enterprises sample which occurred M&A from2005to2009, then we doprincipal component analysis and factor analysis to obtain the M&Aperformance scores for the previous year of mergers and acquisitions, the year of M&A, the year after the merger and two years after the merger. Inaccordance with the classification of the growth rate of industry, we dividedindustry for each enterprise belongs to into three kinds; they are the growthindustry, mature industry and the recession industry. We analysis the businessperformance for three methods of mergers and acquisitions in each typeindustry, in order to verify the proposed hypothesis which is set up in thechapter3of the article and analyze the empirical results through thetheoretical and practical reasons. The innovation of this article is to use thelatest corporate data for the research sample, for example: we use theEnterprises’2011Annual Report which released in2012, that can be describedas time-sensitive, and also better reflect the reality of the study. In addition weintroduce the concept of the industry life cycle, and established a link betweenthe industry life cycle and mergers and acquisitions. Thus the results of thestudy on mergers and acquisitions have a certain practical significance.Finally, we summarize some conclusions of this article through theanalyzing with the empirical results, and analyze the shortcomings in thisarticle and give some expectations for the future research scholars in this field.