Performance Research On Merger And Acquisition-A Case From Shenyin & Wanguo And Hongyuan Securities

Recent years are the key period of transition for the securities industry in our country. Companies have strong capital strength are more competitive in developing innovative business, expanding the scale of operation and avoiding operation risk. Data showed that the concentration degree of securities industry is significantly lower than other financial industry such as banking and insurance. From the point of international inspection, systemically important investment banks such as Goldman Sachs, Morgan Stanley and Merrill Lynch have become powerful and competitive through M&A. The wave of merger and acquisition will become a trend of the securities industry in our country. Marketization of mergers and acquisitions is an important way to achieve the integration of resources and advantages, also a way to promote comprehensive strength.Securities companies can expand operation scale through mergers and acquisition rapidly, but to become bigger and stronger is not a simple thing. M&A is a double-edged sword, and it can integrate resources, expand the scale and improve efficiency, but at the same time, M&A is not appropriate because of enterprise cultural differences and other factors lead to the failure of the merger and acquisition. If fail, it will not be able to produce the effect of 1+1>2, and it is unable to achieve a win-win situation. Therefore, it is important to study the performance of M&A.In this paper, the main conclusions are as follows:(1) Shenwan & Hongyuan securities existing economies of scale. (2) And exist operating synergistic effect after M&A. There are complementary effect from business structure and region complementary from outlets. There are management and organization synergistic effect after M&A, and this is conducive to improve the management performance of the company. (4) M&A has positive effect on both companies’stock price by using event study analysis and during the event period both companies can get positive abnormal returns. (5) By using financial index analysis, it comes to the conclusion that M&A can obviously improve the profitability, assets operation ability and growth ability, but lower the financial security. (6) There exist some problems that reduce M&A performance, such as the culture and personnel integration and the salary system.