A Study On The Performance And The Influencing Factors Of The Overseas Mergers And Acquisitions By Chinese Firms

In recent years, our country starts a new round of overseas mergers and acquisitions boom. The numbers and total amount of overseas M&A are rising year by year. In reality, return and risk are always interdependent. Some domestic enterprises absorbed advanced technology and management experiences of other countries by overseas acquisitions, then broadened the international market and expand the market share. At last, they created significant synergy values of mergers and acquisitions. However, some enterprises ultimately ended in failure. How the overseas mergers and acquisitions of our country’s enterprises perform on the whole and if the strategy of overseas mergers and acquisitions can create values for the enterprise. In addition, what are the factors which can affect the performance of overseas mergers and acquisitions of enterprises. All these questions have become the focus of academic discussion. This paper make a further research in theory and empirical based on the study of the scholars at home and abroad.This paper first introduces the background and status quo of the overseas mergers and acquisitions of Chinese enterprises, then summarys the overseas mergers and acquisitions performance as well as the basic theories on the factors influencing it on the basis of reviewing the study of the scholars at home and abroad. Secondly, this paper selects 75 companies which have the overseas mergers and acquisitions actions on 2000 to 2010 as objects of the research, and evaluates short-term and long-term performance of overseas mergers and acquisitions of our country’s enterprises using event study method and factor analysis. The empirical result shows the cumulative abnormal return rate and the buy and hold abnormal return rate of the companies which have the overseas mergers and acquisitions actions are significantly positive. Specifically, in the short term, in the sixth day after the announcement date overseas M&A events, corporate mergers and acquisitions party cumulative average abnormal returns and abnormal yield reached 4.74% and 1.31%. The factor analysis result also shows that the overseas mergers and acquisitions actions can improve the financial performance of the companies. Thirdly, this paper puts forward the related assumptions of the factors influencing the Chinese enterprises overseas mergers and acquisitions performance in the fourth chapter and tests the assumptions using the cross-section regression model. The empirical result shows some factors such as the nature of enterprises, equity concentration, the management ability of enterprise, corporate debt, the scale of corporate assets and the economic growth situation of the country which the target enterprise locates in will influence the performance of the overseas mergers and acquisitions by Chinese enterprises. At last, the paper summarizes all the research conclusions, then puts forward some corresponding policy recommendations to the enterprises, government management and investors.