Mixed mergers and acquisition research on the influence of the wealth of shareholder of listed companies：In chinatex investment acquired essence securities case

Citation

Pu, Datong. (2017). Mixed mergers and acquisition research on the influence of the wealth of shareholder of listed companies：In chinatex investment acquired essence securities case. (Independent study, Master of Business Administration). Bangkok: Siam University.

Abstract

Mergers and acquisitions from the end of the 19th century has been developed more than 110 years of history. There have been six times in the history of wave of mergers and acquisitions, it is in the wave of mergers and acquisitions in the , world famous companies such as American iron and Steel group、General motors. Mixed Mergers and Acquisition effect has been a hot issue in the field of corporate finance, is also a lot of differences in academia. Capital market in China has developed rapidly in recent years, especially the stock market through continuous expansion and related financial products innovation has become an important force in the world financial market. Along with our country’s capital market development and improvement of mixed Mergers and Acquisition events will be more and more frequent. However, our country has only 30 years of reform and opening-up, the economy is still in transition. The mixed mergers and acquisitions of listed companies in the development of time is relatively short, serious lack of practical experience and theoretical support. We analysis from domestic typical mixed mergers and acquisition cases of mixed mergers and acquisition impact on the wealth of shareholders of listed companies, has the strong theory meaning and realistic meaning. Results of this study also help of listed companies to set up a clear purpose, choose the appropriate targets, the reasonable arrangement of mergers and acquisition integration work, as far as possible, reduce errors in the process of mergers and acquisition decision-making and implementation, ultimately to achieve the optimal allocation of resources.

In 2014, A stock market China Texile investment acquired Essence securities mergers and acquisition events for this case. This is our country capital market typical case mixed mergers and acquisition. After the completion of mergers and acquisitions Essence securities become a wholly owned subsidiary of China Texile investment so as to realize the dock with the capital market. China Texile investment have been added to the main business of securities services to become a double main business company. The income scale and profitability of listed companies will be improved. We mixed mergers and acquisition events in case the impact of in-depth analysis. It helps to accurately define success criteria of mixed mergers and acquisition.

Domestic and foreign scholars on this subject mainly uses financial information research method or use stock event study. Intermittent lag effect and will affect the study of financial data. And many factors affect the stock price movements, is more difficult to eliminate the influence of factors other than mergers and acquisitions in the study. In this paper, the integrated use of financial information study method and stock event study, from the Angle of short, medium and long-term multiple, China Texile investment acquired Essence securities mergers and acquisition events were analyzed. Besides, through changes in the intrinsic value and market value of the two combined analysis, to mix different research period of mergers and acquisition events listed companies combined analysis of the influence of changes in shareholder wealth, to evaluate the mixing of the wealth of shareholders of listed companies mergers and acquisitions events affect provides a new perspective.

First, the study found that no matter from the perspective of financial or from the perspective of shares, China Texile investment company mixed shareholder wealth level improved significantly after the merger. We concluded that mixed mergers and acquisition can improve the financial situation, enhance profitability of listed companies, the conclusion of shareholder wealth growth. Next, the study found that mixed mergers and acquisition can influence market value of listed companies, a significant excess returns for shareholders in the short term, the shareholders in the medium to long term buy and continue to hold larger earnings volatility but positive. At the same time, the study found that the listed company after the merger integration is the key to the success of mixed mergers and acquisition, the equity structure and the shareholder structure of listed companies are the important factors influencing the mixed mergers and acquisitions. Finally, this article provides recommendations for the short-term investors of listed companies, long-term investors, and strategic investors provide investment strategy after mixed mergers and acquisition events, also for the mergers and acquisition market investors efficient identify potential mergers and acquisitions company provides significant guidance.

Keywords:  Mixed Mergers and Acquisition; Shareholder Wealth; China Texile Investment; Essence Securities.

Mixed mergers and acquisition research on the influence of the wealth of shareholder of listed companies：In chinatex investment acquired essence securities case

International Master in Business Administration (IMBA), Siam University, Bangkok, Thailand