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In recent years, due to the rapid development of electronics and information technology in China, TMT (Technology, Media and Telecom) industry develops rapidly. In the meanwhile, the cross-border merger and acquisition (M&A) activity also becomes active in China’s capital market. In this context, the performance of TMT industry in the cross-border M&A market is even more remarkable. From the perspective of TMT industry, this paper studies the cross-border M&A performance of Chinese TMT enterprises. Because few academic researches focus on cross-border M&A performance of specific industries, especially the emerging industries, this paper has both theoretical and practical significance.
This paper follows the study framework of "Theory - Model - Empirical - Conclusion". First, this paper summarizes former scholars’ theoretical research and empirical results in the field of cross-border M&A, emphasizing in aspects such as cross-border M&A motivations, TMT cross-border M&A motivations, and TMT industry M&A performance. Then, this paper describes the status quo and development trend of China's TMT industry and its cross-border M&A market. Based on the characteristics of China's TMT industry, this paper analyzes the theoretical economic effects of cross-border M&A. In the empirical study, this paper selects 70 cross-border M&A events of public TMT enterprises from 2014 to 2015. Based on the principle of financial analysis, this paper adds 11 financial indicators to the factor analysis and builds the comprehensive performance score models for four periods (1 year before cross-border M&A to 2 years after cross-border M&A) respectively. After get trajectory of sample firms’ performance, the “Difference Method” is used to test the cross-border M&A performance in the TMT industry.
According to on the empirical results, this paper comes to the following conclusions: (1) During the “window period” [(T-1), (T+2)], the average comprehensive performance score of sample enterprises shows a “U” shape change trajectory. (2) During the period [T, (T+1)], the performance of sample enterprises continued to decrease, which shows a poor performance of cross-border M&A. (3) Two years after the cross-border M&A, the enterprise performance began to rebound, but did not reach the pre-M&A level.
Finally, based on the actual situation of TMT industry in China, this paper puts forward specific suggestions, so as to promote the development of cross-border M&A market of TMT industry in China and the substantial help of M&A activities for TMT enterprises.