Do Overseas M&A of Chinese Listed Privately-owned Companies Create Market Value? Evidence from the Market Response to M&A Events

doi:10.16382/j.cnki.1000-5579.2018.05.018

Abstract

Abstract:

This paper investigates how and what determinates privately-owned listed companies' response to their overseas M&A. We find that the overseas M&A of privately-owned companies haven't created short-term market value for shareholders in general,and their short-term market value is significantly lower than that of state-owned companies. Further,the examination for the determinants of short-term market value indicates that it is negatively related with the acquirer's size and free cash flow,and it is also negatively related with the variables of target in sensitivity industry and same industry. The results not only provide a new evidence for whether the overseas M&A of privately-owned enterprises create or destroy value,but also provide insights for government monitoring the overseas M&A of privately-owned companies in China,that is,Chinese government should be carefully identify,investigate and monitor the overseas M&A of China's privately-owned companies.

Key words: privately-owned companies, overseas M&A, event study, value of M&A, short-term market response to M&A

LI Yun-he, GE Lin-nan, TANG Meng-han. Do Overseas M&A of Chinese Listed Privately-owned Companies Create Market Value? Evidence from the Market Response to M&A Events[J]. Journal of East China Normal University (Philosoph, 2018, 50(5): 142-151.

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