Research On M&A Performance Of Overcapacity Industry In China

Recently,there is a serious problem of excess production capacity in a part of industry of China.In order to solve this problem,the state issued many policy document,in there,government mention that promoting enterprise mergers and acquisitions is an important meansand encouragesuperior enterprise to mergers and acquisitions.However,as an economic subject aimed to maximize shareholder value,only in the case of M&A can improve business performance,the enterprisewill initiate M&A,and only this,the relevant government policy goals can be achieved.Although the scholars at home and abroad to conduct the thorough research to the enterprise M&A performance for a long time,found that not all M&Acan improve enterprise business performance.Different corporate life style will affect enterprise performance.So this paper use event study for M&A performance in industries with excess capacity specifically,which is in the mature period.Selected a total of 227 sample ofsteel industry,cement industry,coal industry,aluminum industry,flat glass manufacturing and shipbuilding from Shanghai stock exchange and Shenzhen stock exchanges with the sample period from 2010 to 2016.Result was revealed thatthe main M&A types are horizontal and vertical M&A,they total accounted for 81.5% of all mergers and acquisitions,and conglomerate only accounts for 18.5%.This paperalso found that the acquirers' performance can be increased in short time.Within the event period(-10,10),acquirers can get an average of 1.23% of M&A performance,and it is significant under 5% significance level.Moreover,M&A performance from 2010 to 2013 is significant difference with M&A performance from 2014 to 2016.After the discussion of M&A performance,this paper established the multivariate linear regression model to explore influencing factors of M&A performance.The results show thatthe greater size of deal,the M&A performance better.M&A performance of Equity acquisition is superior to the asset purchase.The related party transactions,the types ofM&A,or acquirer'sscale is no significant impact on M&A performance.