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Type Master's Thesis
Scope Discipline-based scholarship
Title DOES THE MARKET LIKE CHINA’S OVERSEAS MERGERS AND ACQUISTIONS? An Event Study of China's Overseas M&As during 2000-2018
Organization Unit
Authors
  • Ya Zhang
Supervisors
  • Michel Habib
  • Yushi Peng
Language
  • English
Institution University of Zurich
Faculty Faculty of Business, Economics and Informatics
Number of Pages 63
Date 2020
Abstract Text With the rise of Chinese overseas mergers and acquisitions (M&A) in the past 20 years, the world has shed more light on China in this field. However, there have been many emerging myths about Chinese overseas M&A in terms of the motivations, the intervention of the Chinese government, whether target firms would benefit from such M&As, etc. This paper uses an event study and tries to come up with a judgement about those myths by combining the evidence from acquiring and target companies with that from both of their competitors. The final evidence shows that the market might have expected that the target firms would benefit from the overseas M&As undertaken by the Chinese firms, while more specifically the market might have not really paid attention to the Chinese overseas M&As until Year 2008. In addition, there could have been no negative market expectation for the targets if the acquirors had relevance to the government, and the market might have had comparatively significant expectation for China’s overseas M&As if the target companies did not have high technology involved. On the other side, the evidence suggests that the market could have never expected the targets’ competitive companies to have potential benefits over the news of China’s overseas M&As. Instead, targets’ competitors show significantly negative abnormal performance around the announcement date, which shows only negative competitive effect. Lastly, the acquirors did not show significant empirical results throughout the event study, failing to justify whether the motivations of the Chinese firms could have been for the firm-wide benefit or for the industry-wide one through the overseas M&A during 2000-2018 by comparing the results from the acquirors’ competitors.
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