Abstract: This thesis applies the event study method and accounting method to investigate the case that Shares of Shanghai Friendship Group Inc. merged Shanghai Bailian Group Co. This M&A created positive short-term wealth effect on both the amalgamated company and the target company. The financial situation and profitability of Shares of Shanghai Friendship Group Inc. has been improved. This thesis shows that market investors has affirmed Shanghai SASAC promoted the integration of advantage assets to realize the “Four Center Goal”. For shareholders, M&A has created the positive wealth effect and the short-term financial performance has been increased.