ACQUISITION IN CHINESE ENTERPRISES

Abstract

Abstract This study report developed the impacts on Mergers and Acquisitions (M&A) on shareholder’s return by the study of thirty-seven Mergers and Acquisitions (M&A) events which happened in thirty-seven Chinese listed companies between the certain decades. Moreover this paper explored the Mergers and Acquisitions (M&A) activities by statistically analyzing the abnormal returns (AR), average abnormal returns (AAR), cumulative average abnormal returns (CAAR), cumulative abnormal returns (CAR) and investigate motives of mergers and acquisitions, performance of the target firm, performance of the acquiring firm, size effect, free cash flow, state owned shares, and age of organization.. The results generally show that target companies were encouraged by a considerable positive growth in terms of value when acquirer companies obtain zero or even negative abnormal returns (AR)s. The result of this study also indicates that target companies experienced significant positive abnormal returns over acquirer companies.

Key words: Cross-border mergers and acquisitions, Chinese listed company.