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An Empirical Study of Post M&A Performance Based on Machinery Manufacturing

On 27/05/2015, in Economics papers, by rain

This study mainly focuses on the acquiring firms’ performance after the M&A transaction. Selected acquiring firms among China listed companies from Machinery Manufacturing M&A events in the year2007as a sample, then collected13financial indicators of each selected firm for the period2006-2010, all financial data for each firm in each year is processed into one general score used for evaluating its performance. Based on this, we comparing the scores between years and also test the difference from following aspects various payment methods, same jurisdiction or not, related transactions or not.By the empirical research, we come to the following conclusion. First of all, same result as other studies, acquiring firms’ performance got no significant change before and after M&A completion. Secondly, with cash payment, the performance decreased first and then increased later. But the performance of stock payment displayed the reverse. Thirdly, in the short term, related transaction let the performance go up while non-related made difference. But in the long term, there’s no significant difference for both. Lastly, companies between same jurisdiction or not also showed no significant difference from the perspectives of short or long term.

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It will be meaningful for the economic growth of China to study the …

On 16/05/2015, in Economics papers, by rain

It will be meaningful for the Economic growth of China to study the rules of M&A and make a efficiency pricing methods. In order to systematically study the factors that affect the price in M&A, make a fair price and put forward the M&A in China, we construct a pricing method of target corporations based on expected utility theory.We make a analysis of the procedure in M&A, including: evaluation of target corporation、synergy in Mergers and bargaining model. Then we construct a bargaining model using expected utility theory, and analyses the affecting of risky attitude and bargaining power to the pricing in M&A and make a positive study of bargaining power of both sides with the data of company in 2006, concentrating on their managing ability and profiting ability. At last an example is made to illustrating the pricing method based on utility theory.We get three conclusions: Firstly, distinguishing the risky averse and bargaining power is a realistic choice to the pricing analysis; Secondly, bargaining power is critical factor in the M&A pricing; this model based on expected utility theory is a practical choice in the analyzing the bargaining power of both sides; Finally, the bargaining power is related to the liability rate of the host、the average ROE of the past three years、the ratio of the public shares to the national shares and the earnings per shares(EPS) of the target corporations.

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Research of M & A Performance and the Influencing Factors on Chinese Listed Companies

On 20/04/2015, in Economics papers, by rain

Mergers and Acquisitions are important ways for enterprises to expand production operation scale, to promote capital intensity and optimize the allocation of resources, and to reach the goal of external growth. Besides, it is also the best index to reflect the market efficiency and the most innovative part of the economy. Five waves of mergers and acquisitions have been undergone since over a hundred years ago in the western developed countries represented by the USA. Mergers and acquisitions have a very short history of only over twenty years in our country. With the development of our own economy and the strength of integration of world economy, mergers and acquisitions between listed companies in our country have been on the rise these days.The performance is the core issue in mergers and acquisitions which is the lasting topic in stock market. Listed companies which have implemented the merger could meet the expected? Whether the business performance can improve? And what factors have influenced the size of the performance? A lot of research has been done from different angles with different method home and abroad according to this topic. However, there are still many problems with it. The international competition environment will be more and more fierce, if the enterprises of China want to be an invincible position in this increasingly competitive international economy, they must overcome all the difficulties, seize the opportunities brought by the merger, optimize the allocation of resources through acquisitions, strengthen competitive advantage and then realize a long-term strategic development target. Consequently, studies on the performance of listed companies, especially on the factors which contribute to the performance and corresponding strategies to improve it, are of great theoretical and practical significance.In this paper, a research on the mergers and acquisitions of listed companies in Shanghai and Shenzhen in 2007 was done from 15 indexes chosen from the Enterprise’s capability of gaining profits, paying debts, operation and development in the 123 sample companies chosen by particular standard. Factor Analysis Method is employed to get the overall score for each company. Based on the comparison of the overall scores in the four years before and after the merger and acquisition, a evaluation was given to the long-run performance of the enterprises in our country. Furthermore, multiple regression analysis was employed to the factors of mergers and acquisitions of enterprises, which lead to some suggestions to improve the performance of the listed companies’mergers in addition with Theoretical analysis and empirical research. The paper has six sections:The first section is introduction which provides the background, the significance, as well as the content and the method used in this paper. Also, some innovation and inadequacy is given.The second section is about the recent research progress which introduces the main findings about the M&A performance and the factors of listed companies by scholars home and abroad and gives a brief comment on it.The third section is about the theoretical foundation and evaluation methods about the performance of the mergers and acquisitions of listed companies. Firstly, this section describes the meaning of mergers and its performance, as well as the classification of mergers among listed companies. Then, it gives the theory of merger driver, including theories of value creation and transfer. Finally, it provides two traditional evaluation methods—-Event Study and Financial Index Analysis, which establish the theoretical foundation for the future analysis.The fourth section is one of the core parts of this paper. It gives the Empirical analyses on the performance of mergers and acquisitions for the listed companies. To begin with, it briefly gives the source of data and the standard of sample choosing; then the paper provides the principles for the choosing of financial indexes; afterwards, Factor Analysis was applied to get the overall scores for the performances of the sample companies in 2006,2007,2008, and 2009; finally based on the overall score model, it gives in-depth analysis about the long-run performance of the listed companies in our country. The fifth section is another very important part of this paper. It analyzed the factors to the performance of listed companies. This section firstly made hypothesis about the relation between different kinds of the features of transaction and performance of mergers; Then it introduced the method to build the model and defined each variable in the model; Finally, Regression Analysis was employed with the overall score of the sample companies as Dependent variables and all the factors as variables to reach our conclusion.The last section is some suggestions to improve the performance of mergers and acquisitions of the listed companies in our country.On the research methods, this paper applied Normative Research combined with Empirical analyses, utilized both quantitative and qualitative research, and also employed comparative analysis and comprehensive generalization.

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An Application of an Artificial Neural Network System to Predict Takeover Targets

On 22/02/2015, in Economics papers, by rain

As a significant way to reallocate the Social resources reasonably, Merger andacquisition(M&A) has always been playing an active role in both domestic and overseacapital markets. M&A has such a strategic significance that it has an irreplaceable effect onthe development of a firm. While a successful M&A deal brings rich profits to the firm, afailing one may drive the firm to the last ditch. The selecting of the target firms is especiallyan important step during the course of M&A decisions. Under different market environmentsand circumstances, the M&A motive and behavior differ from one firm to another. Among agreat number of M&A deals, how to identify target firms is quite important to either listedcompanies, investors, intermediaries or regulatory authorities, and so on. Since theimplementing reform on non-tradable shares fundamentally changes the market backgroundfor listed companies, a new M&A trend is coming. Therefore, in current new environmentand policies, all kinds of interest groups pay more attention to how to predict target firmsduring the course of M&A.This study applied variables selected based on acquisition theories and attempted toidentify potential takeover targets using all available firms from2009to2010. Also, weexamined whether a neural network could outperform Logit analysis.We found that acquired firms were usually small, experienced lower growth rate, andwere relatively concentrated in certain industries. We proved that takeover targets could bepredicted using neural network model and the results are very promising. The prediction rateis reach to78percent, performing better than logit analysis. And neural network model is lesslikely to identify non-target to target firms.

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The Research of Human Capital Valuation Assessment in Merger and Acquisition

On 08/01/2015, in Economics papers, by rain

With the advent of the era of knowledge economy, human capital replaces material capital gradually and becomes an important factor in the business value creation. The focus attention of mergers and acquisitions is from tangible assets to intangible assets, especially human capital. China’s M&A activity is more and more actively in recent years, but the assessment of human capital has not been given sufficient attention, resulting in huge loss of human capital and also makes the Enterprise value is not fully reflected in the M&A, which causes a negative impact of merger integration and Management. Therefore, the assessment of human capital valuation in M&A needs to attract enough attention and become an urgent theoretical and practical issue.Based on the lessons from the related research, this paper carried out a series of research of human capital valuation assessment in M&A. First analyzed the role and impact of human capital in M&A, and pointed out its importance; subsequently build an assessment model which divides the human capital valuation of M&A into two parts, which proposed a quantitative model and theoretical model respectively:finally, analyze the M&A case of Media and Little Swan using the model.The paper did useful exploration of human capital value assessment in theory and methods, aiming to enrich the valuation method of human capital in M&A and bring attention and effective use for human capital, so that people consciously formed the consciousness of respect for talent.

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Empirical Research on the Influence of the M&A of Manufacturing Listed Companies and Enterprises’ Value Creation

On 04/11/2014, in Economics papers, by rain

Our country is working hard to push forward the strategic adjustment of state‐owned Economic layout and structure, M&A is an important means to adjust the national industrial restructuring and reasonable allocation of resources, also M&A is an important way to make the Enterprise stronger and a nimble quickly. The purpose of M&A is to create value for the Enterprise, only if the M&A creates value for the enterprise, it can really highlight the real value of mergers and acquisitions. Manufacturing is the pillar of the national economy, the important symbol to measure a country comprehensive strength and international competitiveness, and also the hot area of the merger and acquisition. The M&A of manufacturing industry list the first place in China’s M&A industry, occupy a large proportion of China’s M&A cases. Therefore, it is meaningful to study the M&A of manufacturing listed companies.From the point of view of the M&A companies, combined with the M&A status of China’s manufacturing industry listed companies, this paper takes148companies that occurred M&A in2008as sample companies, selects10financial data of these companies from2007to2011as the sample data, empirical researches on the merger and acquisition of Chinese listed companies value creation and its influence factors.Using factor analysis, this paper studies the issue whether the M&A can create value, draws a conclusion that the M&A can create value. Through the factor score model obtained composite score of the sample companies each year, then adopts the nonparametric test combined with the two paired samples Wilcoxon test and Sign test, through the positive ratio comparing with value changes before and after the merger of the companies,found that M&A create value for enterprises, but presents undulatory property.Using multiple linear regression model of M&A value creation the paper studies the factors influencing the results found, whether M&A between and enterprise value creating significant correlation, and mergers and acquisitions, equity concentration ratio, the proportion of state‐owned shares, the proportion of independent directors, merger and acquisition net cash flow value creation had no significant correlation. Through the positive ratio comparison before and after the merger of company value changes, find related acquisitions of listed manufacturing companies improve corporate value, and better than the unrelated M&A.

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An Empirical Study on the Effect of China’s Regional Marketization Process to M&A Performance

On 24/10/2014, in Economics papers, by rain

With the development of world Economic integration, global mergers and acquisitions have been intensified, more and more multinational companies use mergers and acquisitions to expand their territory. Similarly China’s listed companies begin to upgrade their own industries and improve their competitiveness through mergers and acquisitions. In a way, they will be more active in global competition. According to statistics, the number of mergers and acquisitions has increased from150ps in1997to3555ps in2012, each transaction amount has also increased significantly from less than million yuan to more than trillion yuan at present. Consequently, mergers and acquisitions is booming. Mergers and Acquisitions plays a vital role in our listed companies’development, which is also an important research subject for our scholars. The performance is the core issue of M&A and is the standard to judge the success of M&A. In this perspective, the performance research is much more practical, so it has also become the focus of this paper.As the institution and market factor of M&A, the marketization process plays an important role to the performance. Our country has begun the shunt of market Economic since1978. Although we have get a great achievement in the process, the marketization process of each region isn’t balanced for China(Fan Gang. Wang Xiaolu,2004), which is a broad country. The companies in different regions face different institution environments. It leads to a question that the marketization process will have what effect on the performance.This paper selects419companies of Shanghai and Shenzhen state holding listed companies in2009as samples. We use principal component analysis to make an analysis to the performance of the samples to calculate their total scores. Then we regard performance as the dependent variable, the marketization process as the explanatory variables, and we also choose some factors as controlled variables such as related transaction, the proportion of state-owned shares, belong to the jurisdiction, the merger and acquisition scale, pattern of payment, Industry Association. The result shoe that the marketization process and performance have a significant positive relationship. At last, based on the conclusion, we give some policy suggestions to improve the performance according our country’ special case.

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Human Resource Integration in Hoirzontal M&A of Our Country

On 23/09/2013, in Management, by rain

Enterprise M&A is the result of industry development and the competition between enterprises, the product of the Social economy development, a sure way of Economic transformation, an effective way of resource allocation. At present, the market of Enterprise M&A are becoming more and more active in our country, and is mainly in horizontal M&A. But related data shows that the success rate of enterprise M&A is very low in our country, we encounter many problems in the process of M&A, and did not reach the targets, human resources integration is one of the main problems. In order to promote the success rate of M&A, and provide operable guideline for human resource integration in M&A, this thesis researches human resource integration of horizontal M&A.Based on some other scholars’research results and the analysis of some cases, this paper summarizes some problems of employee which is in psychology and the behavior, and analyzes these problems to find out the solutions of the problems. I put forward personnel integration, human resources Management practice integration and cultural integration, which are based on effective communication. Personnel integration includes personnel adjustments and layoffs which are established in human resources detailed evaluation. Human resources Management practice integration mainly studies the design of the incentive system which includes the integration in healthy salaries, motivated salaries and the career development of employee according to the two-factor theory. Cultural integration studies the selection of mode, some principles and precautions in the cultural integration of horizontal M&A.The result of this thesis has a certain operability, and it has a certain reference value to the human resource integration of horizontal M&A in our country.

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Empirical Research on the Influence of the M&A of Manufacturing Listed Companies and Enterprises’ Value Creation

On 23/09/2013, in Agriculture, by rain

Our country is working hard to push forward the strategic adjustment of state‐owned Economic layout and structure, M&A is an important means to adjust the national industrial restructuring and reasonable allocation of resources, also M&A is an important way to make the Enterprise stronger and a nimble quickly. The purpose of M&A is to create value for the Enterprise, only if the M&A creates value for the enterprise, it can really highlight the real value of mergers and acquisitions. Manufacturing is the pillar of the national economy, the important symbol to measure a country comprehensive strength and international competitiveness, and also the hot area of the merger and acquisition. The M&A of manufacturing industry list the first place in China’s M&A industry, occupy a large proportion of China’s M&A cases. Therefore, it is meaningful to study the M&A of manufacturing listed companies.From the point of view of the M&A companies, combined with the M&A status of China’s manufacturing industry listed companies, this paper takes148companies that occurred M&A in2008as sample companies, selects10financial data of these companies from2007to2011as the sample data, empirical researches on the merger and acquisition of Chinese listed companies value creation and its influence factors.Using factor analysis, this paper studies the issue whether the M&A can create value, draws a conclusion that the M&A can create value. Through the factor score model obtained composite score of the sample companies each year, then adopts the nonparametric test combined with the two paired samples Wilcoxon test and Sign test, through the positive ratio comparing with value changes before and after the merger of the companies,found that M&A create value for enterprises, but presents undulatory property.Using multiple linear regression model of M&A value creation the paper studies the factors influencing the results found, whether M&A between and enterprise value creating significant correlation, and mergers and acquisitions, equity concentration ratio, the proportion of state‐owned shares, the proportion of independent directors, merger and acquisition net cash flow value creation had no significant correlation. Through the positive ratio comparison before and after the merger of company value changes, find related acquisitions of listed manufacturing companies improve corporate value, and better than the unrelated M&A.

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Research on the Influence of Enterprise Growth by M&As

On 23/09/2013, in Management, by rain

Nowadays,the global economy develops swift, the growth of Enterprise has to be in ahigh speed.M&A,as a convenient way of the growth of enterprises,had been happeningall through the world. Yet recent years, in our country the number of the Enterprise whichseeks to grow through M&A, is also growing sharply, but the result is not the same, someenterprises achieve growth or short-term growth through M&A, and other enterprises arein struggles. Therefore, what is the influence of the growth of the enterprise by M&A,especially long-term impact, is particularly important to study.This paper is based on the comprehensive review and analyzes on the basis of a largenumber of documents, restates the M&A and enterprise growth related theory, analyzesthe business enterprise growth mergers and acquisition and the relationship between thedifferent factors affecting the growth of the enterprise merger of influence. This paperselects the two cities in Shenzhen and Shanghai in2006of the66merger enterprises assamples to research, how the enterprise executives the Social responsibility reflects howthe enterprise grows, so from five aspects of the enterprise scale expansion ability,operation ability, profit ability, the ability to pay cash and Social responsibility indicators,through setting up enterprise growth index system, using the method of factor analysis,extraction public factor, according to various public factor variance contribution to set upthe business enterprise merger scores growth model,calculation of annual growth of theinfluence on enterprise merger comprehensive score, and the analysis of the results, andconcludes that the merger promote enterprise in the short term rapid growth,but forenterprise long-term growth impact was not significant. On the basis of factor analysis,this paper analyzes the acquisition and different motivation, different types, differentpayment merger and whether to enterprise through mergers and acquisitions for affiliatedparties the influence of growth mode, and the results showed that the economy of scalemotivation and merges merger of enterprise growth for short-term effects are effect,long-term impact is negative, and reduce transaction cost and system effect motivationand other types of merger acquisition enterprise growth for negative influence short-termand long-term influence positive effect;The different Payment and whether the businessenterprise growth impact by M&A are no significant differences.