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Mergers and Acquisitions in China in the 21st Century: A Comparison Study Between Strategically Acquired and Financial-Sponsored Investments

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Title: Mergers and Acquisitions in China in the 21st Century: A Comparison Study Between Strategically Acquired and Financial-Sponsored Investments
Author: Xu, Ruilin
Advisor: Mudd, Shannon
Department: Haverford College. Dept. of Economics
Type: Thesis (B.A.)
Issue Date: 2011
Abstract: This study compares the differences in the market perceptions and the actual performances of strategically acquired firms and of financial-sponsored firms in China from 2006 to 2009. Two main hypotheses here are: 1) A merger & acquisition (M&A) activity creates value for acquired firms, regardless of the types of investors; 2) Strategically acquired firms create less value over the same time period compared to the financial investor-backed firms due to the differences in the acquirers’ motivations. In order to prove these hypotheses, standard event studies that look at the cumulative abnormal returns of the acquired firms over periods of [-20, 20] and [-120, 80] are used. Our results confirm that mergers & acquisitions do create market values for the acquired firms. Our results also show that while in the short term the market perceives M&A activities involving strategic investors to be slightly better, this difference diminished after the 07-08 financial crisis. In the long run, the financially sponsored firms have gradually performed better than the strategically acquired firms, especially after 2007.
Subject: Consolidation and merger of corporations -- Government policy -- China
Subject: Consolidation and merger of corporations -- China
Terms of Use: http://creativecommons.org/licenses/by-nc/3.0/us/
Permanent URL: http://hdl.handle.net/10066/6968

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2011XuR_release.pdf **Archive Staff Only** 885.3Kb PDF
2011XuR_thesis(Abridged).pdf Abridged Thesis 453.9Kb PDF
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Citation

Xu, Ruilin. "Mergers and Acquisitions in China in the 21st Century: A Comparison Study Between Strategically Acquired and Financial-Sponsored Investments". 2011. Available electronically from http://hdl.handle.net/10066/6968.

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http://creativecommons.org/licenses/by-nc/3.0/us/ Except where otherwise noted, this item's license is described as http://creativecommons.org/licenses/by-nc/3.0/us/

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