An Empirical Study on the Merger and Acquisition Performance of Chinese Private Listed Companies

Merger and Acquisition has become an important method for Chinese private listed companies to expand their production capacity and acquire greater market share. Meanwhile, however, whether M&A can bring better performance has become the theoretical and practical focus in China. By adopting the assessment method of accounting ratios and with reference to the financial data from 42 sampled companies, factor analysis is made by selecting 9 financial ratios related to companies´ financial solvency, liquidity, profitability and growth potential reflecting their core competence. The empirical results indicate that the M&A performance in these companies is not significant. In order to improve the said M&A performance, it is suggested by the authors that effective measures should be taken in the level of companies and governments.