Research On The Performance Of Chinese Companies In Cross-border Mergers And Acquisitions By The Example Of Yanzhou Coal Mine

In the past two years,Chinese enterprises have shown a strong growth in foreign investment,the number of cross-border mergers and acquisitions increased so fast that the amount of transactions set a new record.Many companies want to achieve industrial restructuring and the optimal allocation of global resources across by M&A in overseas.So most of domestic resource companies have to look at their eyes to the high-quality mineral resources in other countries,Yanzhou Coal Mining Company Limited is one of the most representative enterprises.However the market formed a completely different view about its series of cross-border M&A.On the other hand,the evaluation of M&A is the research hotspot of scholars in the world,and the focus of academic debate is whether the behavior brings value to the company.In conclusion,how to summarize up the experience of Yanzhou Coal overseas expansion is important practical significance in the trend of "going out" in China.Firstly,it take the cross-border M&A event of Yanzhou Coal from 2004 to 2016 as the sample of research in this paper.Secondly,compare the changes of the abnormal return about the M&A as its short-term performance by the event study using the empirical data of the HKEx.Thirdly,select the 11 representative financial indicators to extract the main component factors and build a long-term comprehensive evaluation model of the cross-border M&A.Finally,it evaluate the long-term performance of the cross-border M&A for the enterprise by compare the change of the sample company's profitability?solvency?operational capacity?development capabilities and comprehensive score in every quarter of the three years before and after the merger.The results show that the short-term share price of the Yanzhou Coal has been significantly lower since the merge of series cross-border M&A due to the defects of the acquisition target itself?the harsh conditions of acquisition?the turbulence of the international coal market and so on.It indicates that the series of the cross-border M&A have not been created wealth for their shareholders in the short term.Besides,the long-term performance evaluation shows that its profitability?solvency and operational capacity have been varying degrees of decline after the acquisition as well as the final comprehensive evaluation.In particular,huge foreign currency debt has seriously depleted the profits and cash flow of the enterprise such as making the profitability of enterprises decline?the deterioration of financial structure?increased leverage?debt service capacity weakened.Finally,according to the conclusion of this paper,summed up the lessons of M&A and put forward the corresponding recommendations combined with the status quo and characteristics of cross-border M&A in China.