Research on the Performance of Foreign Capital Merger Acquisition of Chinese Listed Companies Based on EVA

摘要

The paper uses economic value added (EVA) as a tool to analyze whether foreign-capital merger and acquisition (M&A) can effectively improve the performance of listed companies in China and the impact degree of the type of foreign-capital M&A on its performance, which will provide investment decision support for a listed company before its acquisition in order to achieve the rational use of foreign capital to integrate the resources. Using the modified EVA system, the paper compares vertically and analyzes the performance of M&A listed companies by foreign capital during 2003-2006 according to one year before, the year, one year after, and two years after the foreign-capital M&A, and examines the performance before and after M&A of the listed companies of horizontal, vertical and mixed M&A to verify whether foreign-capital M&A can bring value creation for listed companies in China. The results show that all the sample companies' average EVA is increased year by year after M&A from one year before to two years after the M&A. Foreign-capital M&A activities helps to improve the performance of the listed companies, and it creates value for the company; Different types of M&A results in different M&A performance, seeing from the average EVA, horizontal M&A companies' performance is increased year by year in the three years from the year before to the year after M&A, which demonstrates horizontal M&A can promote the company's development by scale economy effect in a short of time and create M&A value. The performance of vertical M&A and mixed M&A companies are all first decreased then increased,??????@which shows that performance producing needs a process for both the vertical M&A focusing on the transaction costs reduce and the mixed M&A designed to achieve diversification operations of the company, in this process, the company's performance may even fall down temporari- - ly. Both vertical M&A and mixed M&A have certain of risk, the successfully integration after M&A is the key to the expected effects. Through internal market transactions, vertical M&A can expedite supply and marketing channels, reduce the uncertainty of risk and cost, obtain the purpose of enhancing the stability of company development; while through diversification operations, mixed M&A can realize industry transformation of the company to foster new earnings point, thus disperse risk, and improve corporate performance.