Financial pre-factors for post-performance of cross-border mergers & acquisitions

Abstract

ABSTRACT We study mergers and acquisitions (M&A) when one company is Chinese and another company is outside China. Previous studies are still much lacking considerations on financial factors affecting subsequent performance of such multinational (or ‘cross-border’) M&A. Here, a few (5) influencing factors are tested through a multiple linear regression model for 100 listed companies over [2016–2018]. We examine the role of (i) the mode of payment, (ii) cultural differences, (iii) industry differences, (iv) company scale and (v) the shareholding ratio. The research denotes that the payment method and the shareholding ratio of the largest shareholder have both a positive correlation with the performance in the year of the M&A and in the following one, – whatever the industries differences and companies sizes.