The Study on Merger and Acquisition of the Listed Companies Based on the Split Share Structure Reform
|Keywords||Listed companies Split Share Structure Full circulation Merger and Acquisition Tunneling and Propping|
The company M&A is an important form of resource allocation and optimization of the capital market, and also important driving strength of its development. The economic development history of the countries leading in market economy development, in some sense, is the history of company M&A. However, a phenomenon of Split Share Structure exists in the capital market of our country due to historic reasons. The shareholders of listed company are divided into non-tradable shareholder and tradable shareholder, showing the Chinese characteristics of“the same shares with different rights, the same shares with different price and the same shares with different interests”. Split Share Structure makes corporate governance lack of common benefit basis and becomes a significant obstacle of perfect stock market basis system. In this condition, the listed company M&A of our country is very different from mature capital market, existing a lot of defect and making the positive effect of M&A activity can not embody easily. Split Share Structure reform is the important catalyst to push forward the listed company M&A, and the M&A market in China will enter a“new era of M&A”with full of new opportunities. So, it is of great practical sigjificance and theoretical value to study the listed company M&A from the period of Split Share Structure and its reform thgroughly and systematically.First, the paper combs through the theoretical and empirical research resulvs of Split Share Structure ref?rm and tle listed company M&A, points out the defect and problem existing in current study, and lays the theoretical foundation for discussing the following chapters.Second, the paper sets up a brand-new explanation framework of a listed company M&A Tunneling and Propping theory by applying Game Theory. In this framework, the game model is set up in terms of connected M&A and inconnected M&A, studying tactics choice of the M&A big shareholder and impact of the different system arrangement on tactics choice. As far as inconnected M&A is concerned, the M&A company’s quality is better in the situation of the split share structure, the strong shareholder is inclined to adopt tunneling tactics, especially when market risk is bigger and inflation rate is high, the big stockholder’s behavior becomes more short-sighted. While in the full circulation situation, the solution of the same shares with different price problem makes strong shareholder’s tunneling behavior being restrained. In terms of connected M&A, the strong shareholder is inclined to adopt tunneling tactics in the situation of the split share structure, but the small shareholder will adopt the tactics of voting by feet. The motivation supporting tactics of the strong shareholder is strengthening , the small shareholder also may switch over to use voting by hand in the full circulation situation.Once again, the paper has carried out empirical researches on the listed company M&A behavior in the situation of the split share structure and the full circulation. In the situation of the split share structure, basing on examining our stock market trend of the last decade, as well as 180 mergers and acquisitions in china stock market from 2002 to 2003, this chapter investigates the Adverse Selection and its long-run equilibrium characters: long-run stock market is sluggish, and the more flagging the stock market is, the more the vast majority of listed companies is inclined to act tunneling. At the same time, it points out that the Split Share Structure in china stock market had aggravated further the Adverse Selection and long-run equilibrium situation. In the situation of the full circulation, The paper does an empirical study on the sample of mergers and acquisitions conducted in listed companies (the deadline of financial data is 2008-4-30)with full circulation after their Split Share Structure reform from 2005 to 2006, and analyzes the company performance reaction pattern by Split Share Structure Reform, M&A company which is a good company affects company performance or not, and connected M&A’s effect on the connected company. The study indicates the listed company M&A behavior motivation changes, and M&A behavior motivation appears a diversified trend, strategy M&A with aim to industry integration will increase more and more.At last, the paper puts up the practical countermeasure about perfecting Split Share Structure Reform and improving listed company M&A efficiency. To shareholders with over 5% non tradable share and with less than 5% non tradable share, stock reduction and information disclosure procedure should be strict, and the stable social responsibility fund of shareholders with over 5% non tradable share and with less than 5% non tradable share should be set up. To the new share issue system, the key of reform is benefit assignment. One side, price issuing step by step becomes market-oriented, adopting“sale with market value“with“one people X hand“issuing system on the other hand. The government should reduce administrative intervention, from“visible hand”of tangibility helping directly to“invisible hand”of the market orientation and the environmental improvement step by step. The regulatory sector should perfect law and regulation system, strengthen market information transparency, and tighten supervision and managing system. The intermediary institutions should play an active role in the M&A market. The listed company should perfect inside corporate governance, and make clear of the M&A purpose and the challenge of defending M&A.