The Impact of Merger and Acquisition Premiums on Corporate Growth

Lijuan Zhang; Zirui Song

doi:10.54097/jtr7rb85

Authors

Lijuan Zhang
Zirui Song

DOI:

https://doi.org/10.54097/jtr7rb85

Keywords:

M&A, Premiums, Corporate Growth

Abstract

As one of the crucial ways to achieve rapid growth for business, mergers and acquisitions (M&A) in China often involve the payment of premiums by the acquiring company for reasons such as synergies and growth motivations. This study focuses on A-share listed companies in China that underwent significant asset restructuring from 2011 to 2021 as the sample, aiming to investigate the impact of premiums in M&A transactions on corporate growth. The research finds a significant positive correlation between premiums in M&A and corporate growth. Further analysis reveals that the impact of M&A premiums on corporate growth exhibits heterogeneity. The promoting effect of M&A premiums on corporate growth is more pronounced in non-state-owned enterprises, cash-paid acquisition enterprises, and non-affiliated acquisition enterprises.

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