The Development And Innovation Of Chinese Industrial M&A Fund

The “Listed Company & PE” model of industrial M&A fund is a model with Chinese characteristics.It originated from the industrial integration fund established by Silicon Paradise and DAKANG Food & Agriculture in 2011,grew rapidly in 2014 and broke out in 2015.Now it has become the mainstream way for listed companies to integrate industries.This paper makes an in-depth study on the development and innovation of Chinese industrial M&A funds based on 1023 announcement data of Chinese listed companies setting up industrial M&A funds in 2011-2017.Firstly,this paper summarizes and analyzes the development status and characteristics of industrial M&A funds that Chinese listed companies have participated in.I found the growth of Chinese industrial M&A funds in both scale and quantity,and the characteristics of registered area selection,also summarized the industries of these listed companies.Secondly,on the basis of reading a large number of listed company announcements,this paper further divides the “Listed Company & PE” model into six types.And according to the literature and theoretical support of Chapters 2 and 3,this paper summarizes the characteristics of each type and analyzes the advantages and disadvantages.Then I measureed the short-term response of capital market to establishment of industrial M&A funds under different model types through Event Study,and try to provide possibility explanation for the short-term response according to the previous analysis of each type.Finally,this paper select two listed companies-TUBAO and DONGHU High-Tech as typical cases to make a more intuitive display.This paper found that in recent years,the number of industrial M&A funds newly established by listed companies in China has stabilized at around 350,which tends to be saturated.Listed companies in emerging industries are more likely to set up industrial M&A funds than that in traditional industries,and the investment direction of M&A funds is more relevant to company's industry.The choice of industrial M&A funds' registration place is significantly positively correlated with the regional economic development,the number of local listed companies and whether there are preferential policies,and the distribution in east and south is obviously more than in west and north.The six models have their own advantages and disadvantages,the most selected mode for listed companies is M1.The overall short-term response of the capital market to the establishment of industrial M&A funds by listed companies is positive,from the perspective of various types,the short-term recognition of investors is E>S,M2>M1>M4>M3.