The Effect Of PE On The Performance Of Cross-border M&A Of Manufacturing Enterprises In China

During recent years,with the acceleration of China's "going out" pace,cross-border M&A has increasingly become an important way of China's foreign direct investment.In recent years,the scale of overseas mergers and acquisitions of Chinese enterprises,especially manufacturing enterprises,has become larger and larger,but the success rate of cross-border mergers and acquisitions is at a low level.On the other hand,in recent years,the rise of domestic PE and the influx of foreign PE have ushered in a new stage of development in China.The advantages of PE institutions can provide a new strategic path for Chinese enterprises to invest overseas,and play an important role in the successful implementation of cross-border M&A by Chinese enterprises.Therefore,the mode of M&A between listed companies and PE emerges as the times require.This win-win capital operation mode has attracted the attention of investors and the capital market.More and more enterprises begin to seek cooperation with PE.Under the background of the high enthusiasm of cross-border mergers and acquisitions of Chinese enterprises and the great opportunities for the future development of Chinese manufacturing industry,there are more manufacturingcompanies adopt the capital operation mode of PE cooperation to complete cross-border mergers and acquisitions.This paper studies the impact of overseas M&A on M&A performance under the cooperation between listed manufacturing companies and PE.The main study contents of the paper are as follows: Firstly,the related background is described.It includes the strategic analysis and existing problems of cross-border M&A of listed manufacturing companies in China,and the advantages of PE institutions participating in cross-border enterprises.Secondly,through the analysis of a classic case of merger and acquisition in 2016-the merger and acquisition of LED VANCE by Mulinsen,we can see that after the completion of the merger and acquisition,Mulinsen has better short-term and long-term performance.The main reason can be attributed to the certification effect of IDG capital participation in M&A and the synergy effect of LED VANCE after M&A.It can be seen that the selection of PE institutions for cooperative M&A and successful integration of the target enterprises are very important for M&A performance.Secondly,in order to obtain more universal results,this paper selects the cases of cross-border M&A of manufacturing listed companies listed on A-share in China in combination with PE from 2015 to 2016 as samples,chooses the cumulative excess return before and after M&A as short-term M&A performance indicators,uses factor analysis to deal with the financial indicators of these sample companies,and establishes a model to get the sample companies before and after M&A.As a long-term M&A performance index,the total score of performance is compared and analyzed.It is found that the short-term and long-term performance of the sample group with PE participating in cross-border M&A is better than that of the sample group without PE participating in cross-border M&A.That is to say,PE's participation in cross-border M&A of listed manufacturing enterprises in China is beneficial to M&A performance.Finally,based on the conclusions of the above papers,this paper proposes that China should relax the regulatory conditions to promote the development of PE M&A funds.