Study On The Causes Of High Premium In Overseas Mergers And Acquisitions Of Chinese Mineral Enterprises

Since 1978,when China implemented reform and opening up,Chinese enterprises began to follow the pace of economic globalization and actively integrate into the world.During the third session of the Ninth National People's Congress held in March 2000,the state formally put forward the strategy of "going out" for Chinese enterprises.In the following years,a series of policies were promulgated to provide strong support for the smooth "going out" of Chinese enterprises.It is under the vigorous impetus of the state that the pace of "going out" of Chinese enterprises is constantly increasing,and the amount of foreign direct investment is also rising year by year.The net foreign direct investment of Chinese enterprises has increased for ten consecutive years from 2002 to 2011.The financial crisis in 2008 has brought unprecedented opportunities for Chinese enterprises to "go out".The world economy is in a downturn and the domestic impact is relatively small.Chinese enterprises seize the opportunity to set up subsidiaries overseas and acquire a large number of overseas enterprises.While the number and amount of overseas M&A of Chinese enterprises continue to increase,the phenomenon of "high premium" of overseas M&A has also attracted wide attention.Mineral enterprises in these enterprises are particularly noticeable.As the earliest enterprises responding to the "going out" strategy of the country,Zijin Mining paid a high premium repeatedly when acquiring overseas enterprises.In 2015,Zijin Mining paid a premium of 32% for acquiring Norton Golden Field,an Australian gold mining enterprise.However,in 2008,the average premium of overseas mergers and acquisitions of Chinese enterprises was only 10%.Based on this background,this paper chooses the case of Yanzhou Coal Industry acquiring Coal & Allied of Australia Coal Company in 2017,trying to summarize the causes of the high premium of overseas mergers and acquisitions of China's mineral enterprises through the analysis of this case.On the basis of a large number of studies on the causes of M&A premium at home and abroad,combined with the specific transaction process of Yanzhou Coal Industry's acquisition of United Coal,the causes of high premium in overseas M&A of China's mineral enterprises are discussed from five perspectives: anticipated synergy effect of main merger enterprises,value evaluation of target enterprises,overconfidence of managers,nature of state-owned enterprises and attributes of resource industry.The results show that the anticipated synergy effect,managers' overconfidence,the nature of state-owned enterprises and the property of resource industry are all the causes of the high premium of M&A.At the same time,the high premium of M&A can also be caused by good performance expectation and consideration of intangible assets valuation when evaluating target enterprises.The main innovations of this paper are as follows: Firstly,previous studies on overseas M&A premiums mainly focused on M&A between developed countries and M&A between developed countries and developed countries to developing countries.Taking Chinese enterprises' M&A of Australian enterprises as the research object,this paper explores the causes of high premiums of developing countries' M&A of developed countries' enterprises;secondly,this paper will manage for the first time.The influence of managers' overconfidence on M&A premium is introduced into the case study,which breaks through the limitation of using only large samples to analyze the relationship between them in the past,and helps to measure managers' overconfidence more concretely and understand the reasons for the high premium caused by managers' overconfidence.Thirdly,in view of the particularity of our country as a characteristic socialist country,the nature of state-owned enterprises in mineral enterprises and the reasons for the high premium caused by managers Resource industry attributes are included in the study of the causes of high premium of M&A,which has played a supplementary role to the existing research results.Finally,in view of the reasons for the high premium of overseas M&A of China's mineral enterprises,this paper puts forward corresponding suggestions,which will play a guiding role in the pricing of overseas M&A of China's mineral enterprises in the future.