Research On Financial Characteristics Of M&A Target Companies

Successful merger and acquisition activities can bring many favorable conditions to the enterprises of both sides of the merger and acquisition,which makes the current merger and acquisition activities in China’s capital market in full swing.The key to the success of m&a is to choose the right target company.Therefore,from the perspective of finance,it is of certain significance to study the financial characteristics of the target company of m&a according to the financial data disclosed by the enterprise.Therefore,I choose to study the financial characteristics of m&a target companies as the title of my master’s thesis,so as to provide a basis for the decision-making of m&a enterprises.In this paper,the relevant literature review at home and abroad were reviewed in this paper,the first,and then used this article elaborates the related concepts and merger and acquisition theory,through the efficiency theory,agency theory,the theory of free cash and undervalued theory and backdoor listings motive,government to promote motivation and analyzed in detail,put forward in this paper,the research hypothesis,The low efficiency of management of the company is easy to be acquisitions,equity scale(plate)small companies are more likely to become company acquisitions,equity is dispersed are more likely to be acquired by acquisition,cash flow enough companies are more likely to be the object being acquired,and companies are more likely to be undervalued by acquisitions.Then select A certain number of research objects in China’s a-share market: this paper selects the companies that have the transfer of control from 2016 to 2018 as the target companies,and selects the same number of non-target companies from the listed companies as the judgment standard to make A comparison and form A control group.After that,financial indicators representing the above six hypotheses were selected,and financial data of the experimental group and the control group in the year before the merger and acquisition activity were selected for research.In this paper,descriptive statistics,paired sample t-test and Logistics analysis were used to conduct the research.The empirical results support the hypothesis that companies with small share capital(small size)are easy to become m&a target companies and that companies with dispersed share capital are easy to become m&a target companies.At the same time,it is concluded that companies with high management efficiency are easy to become m&a target companies,companies with overvalued stock prices are easy to become m&a target companies,and companies with large free cash flow are easy to become m&a target companies.These results are not consistent with the original hypothesis,and the reasons for the differences are explained in the paper.Finally,according to the above theories and empirical results,the paper puts forward corresponding Suggestions for Chinese enterprises and analyzes the deficiencies and prospects of the research.The conclusion of this paper can provide a certain degree of help for future research and provide a certain theoretical basis for m&a enterprises to find m&a target companies.