The Analysis Of Relation Between Foreign Capital M&A Motives And M&A Premium

With the development of economic globalization and the increasingly sophisticated capital markets, publicly held companies give the gesture of globalization and standardization gradually. Meanwhile, FDI and economic growth affect each other interactively. Cross-border Mergers&Acquisitions (M&A) and equity merger get Overseas Multi-National Corporation an opportunity to notice Chinese publicly held companies. Takeover premium is a product of equity merger. M&A price has been the most important issue for both sides of M&A. In other words, M&A price is a reasonable measurement of the intrinsic value of publicly held companies and also a result of free market. Merger motive of both sides affects this price in a direct and fundamental way. Therefore, equity acquisition pricing system is not only related to both sides of acquisition, but also the development of M&A market in China.Therefore,(1) From the motives of foreign merger and acquisitions, this article recalls theory and literatures of M&A motives and takeover premium, and do research on the connection between M&A motives and premium in theoretically.(2)Study cases of M&A in China and overseas M&A and class motives of M&A into3:Financial Synergies, Market-oriented Motive, or state-owned-share agent.(3)According to3acquisition motives, form the framework of empirical research.(4)Collect data of M&A during2002-2012, and expound which motive affect takeover premium by descriptive statistics, Correlation analysis of variables, regression analysis.(5) With the case study of Danone, a French food company merger Bright dairy and food co. at a high premium, I try to uncover the connection among merger motives, takeover premium and performance.(6) I draw a conclusion and give political advises that how to recognize impact of merger. I will expound my research on this subject into six chapters:Chapter one:Introduction. Introduce background and meaning of this subject and let reader have a clear understand the framework and logic of this article. Chapter two:Research on literature. Review of the theoretical and empirical research on mergers and acquisitions at premium.Chapter three:Analysis of the relationship between motive of foreign capital merge and acquisition and acquisition at premium. Based on study of cases in history, I class merger motive into3categories:Financial Synergies, Market-oriented Motive, or state-owned-share agent. Introduce the framework of empirical research according to3motives.Chapter four:Empirical test. Design the framework of empirical research from4sections-Formulate an assumption based on merger motive; Choose merger premium rate; Select samples; Construct model and define variables. Select78foreign mergers during2002-2012, and expound which motive affect takeover premium by descriptive statistics, Correlation analysis of variables, regression analysis.Chapter five:Performance evaluation. Study cases and evaluate the performance of target companies after merger and their return of investor.Chapter six:Conclusion and political advises. Draw research conclusion that considering the motive of M&A and long-term impacts of merger at premium.