The Influence Of Family Involvement On Corporate M&A

With the reform and opening up of the country,China's family business development has been very fast,and became an important contributor to China's sustained,rapid and steady economic development.In order to achieve leapfrog development,more and more family enterprises have adopted the strategy of M&A,making it to some extent an important and even representative economic activity of the business.For these family-owned businesses,M&A is a "double-edged sword".On one hand,it creates competitive advantages such as optimizing resources and realizing synergy effect.On the other hand,it will increase the cost of management and dilute the family equity.So what kind of family involvement will bring positive impact to the enterprise,and what kind of family involvement will lead to enterprise value reduction? What are the underlying reasons?In order to explore the above issues,this paper first explores the relevant theoretical literature review,then defines and summarizes family business,mergers and acquisitions and other related concepts,and finally analyzes the relationship between the two.In the end,M&G and COMIX,both culture,education and entertainment industries,have been chosen for this research and analysis.This paper compares the degree and extent of family involvement within M&G and COMIX by summarizing the M&A events since they went public.It also analyzes the different M&A motivations as a result of different level of family involvement and how such differences affect the types of M&A.It is found that different level of family involvement will lead to different incentives of M&A,consequently leading family firms to choose different types to excercise M&A.Specifically,firms with a high degree of family involvement tend to pursue non-economic interests,and tend to make achievements in M&A.The types of M&A Adopted are mostly within closely related businesses,resulting in superior long-term performance.Contrastingly,those with lower level of family involvement tend to pursue self-interest M&A with non-related M&A,resulting in less ideal long-term performance.Through comparative case study,this paper analyzes the influence of different family involvement degree on the motivation and types of M&A,and develops a new way to study the impact of family involvement on M&A behavior of family business,while providing some practical enlightenment for family business and investors.