Research On Influence Factors Of M&A Synergetic Effect

In recent years, M&A market in China has been gradually active, with anapparent growth trend in numbers and scales, and with more industries and fieldsinvolved in. In order to guide and make rules for M&A activities theoretically, moreand more scholars began focusing on this field. Many domestic experts and scholarshave conducted a lot of study on the synergy effects growing with M&A, how, theyonly pay attention to the overall synergy effects of M&A, and potential research onthe specific factors of synergy effects of M&A should be covered.This paper selected M&A transactions of China’s listed companies from2008to2010as the research target, and chose the financial indicators data as the basis formeasurement of synergies. First, the paper calculating the composite score ofperformance of the M&A business and objectives according to the factor analysis,comparing the difference score between adjacent year and take this as the obtainedmerger synergies in that year. Second, based on enterprises their own, selected thefive factors: concentration of ownership which reflect the enterprise managementmechanism, acquisitions correlation of mergers and acquisitions’ strategic matchingrelations, payment related to acquisition corporate’s financial cash flow, relativescale reflects the integration strength of acquisitions, and buyer’s pre-mergerperformance of M&A business’s operation conditions as the research target from theperspective of the micro factors, proposed hypotheses and built synergies factorsmodel; Finally, according to the results of the multiple linear regression modelmaking empirical analysis, testing the hypotheses, exploring the conclusions of thispaper and making policy recommendations.In this study, financial indicators that reflects a firm’s profitability, growthability, operation capability, and cash flow generation were selected as measurementof synergy effects of M&A, and analyzed the relationship between different factorsand synergy effects of M&A. This practice is more specific and targeted than theprior practice of adopting simple financial factors. Findings of the study suggestthat although it is a long way to realize synergy effects for M&A firm, overall,synergy effects have been gained for most M&A. Before the M&A, enterprisesshould select the target enterprises based on its development strategy, as well astheir own profitability. And in the M&A process, both sides should also payattention to the internal integration in order to achieve efficient collaborativemanagement. This study is intended to improve quantitative measurement ofsynergy effects and further enrich research on factors affecting synergistic. And it is expected that researches on synergy effects of M&A can reach to a higher level.