The M&A Performance Of Cement Industry In China

In January22,2013, the Ministry of industry and information technology, Development and Reform Commission joint12ministries of issued "guidance" on promoting the merger and reorganization of enterprises in key industries, support and encourage the integration of the nine key industries vigorously. Cement industry growth rapidly in the past10years becouse of the great increase in fixed-asset investment, resulting in a substantial increase in production capacity and output value, making contribution to China’s economic development. With China’s economic growth slowing down, cement industry has entered the "control incremental,optimize inventory" period. Mergers and acquisitions have become effective means to improve the relationship between supply and demand of cement industry, enhancing the overall competitiveness of industry. The issue analysis the present situation and the trend of industry, attempts to study the M&A performance of cement enterprises in our country combing the occurred acquisitons and explain the variation of M&A performance with some M&A characteristics.In the paper, the author using factor analysis to get enterprise M&A performance score to observe the cement enterprises performance after M&A through the selected cases occuring during2002and2010. The result shows that there is no significant change in cement enterprise M&A performance. Additional, use the stepwise regression analysis to explain the change of M&A performance by characteristics of the M&A transcation. It is found that cash payment, vertical M&A have significant negative effect on M&A performance of cement enterprises, while the state-owned controlling shareholder has positive effect. The ratio of large shareholders shows reverse effect on performance of enterprises in the first year after M&A and rebound after the secend year. Relative transction size may be associated the performance of M&A with negative correlation.In addition, according to two cases which made continuous improvement of performance in the sample (Yatai group, conch cement), we found relatively smaller M&A transctions (<5%), horizontal mergers and acquisitions, the state-owned controlling shareholder, medium shareholding ratio has positive effects on M&A performance of cement enterprises, but whether the same region, related party transactions and payments methods’ effects on the performance of M&A are still uncertain.