Advances in Economics, Management and Political Sciences

- The Open Access Proceedings Series for Conferences


Proceedings of the 7th International Conference on Economic Management and Green Development

Series Vol. 40 , 10 November 2023


Open Access | Article

The Impact of Mergers and Acquisitions on the Long-Term Performance of Securities Firms

Zirui Ling 1 , Haorong Sun * 2 , Zhejia Yang 3 , Xinyue Zhang 4
1 University of Shanghai for Science and Technology
2 The Ohio State University
3 Hangzhou Yuhang NO.2 high school
4 Renmin University of China Suzhou Campus

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 40, 122-132
Published 10 November 2023. © 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Zirui Ling, Haorong Sun, Zhejia Yang, Xinyue Zhang. The Impact of Mergers and Acquisitions on the Long-Term Performance of Securities Firms. AEMPS (2023) Vol. 40: 122-132. DOI: 10.54254/2754-1169/40/20232005.

Abstract

In China, the generally small size and weak financing capacity have affected the growth of the securities companies. In recent years, many securities firms have adopted mergers and acquisitions (M&A) to expand the size of their businesses and it is necessary to study the impact of M&A on their long-term performance. This paper selects the acquisition of Guangzhou Securities by CITIC Securities as a case study to examine the impact of M&A on long-term performance. The paper first analyses the motivation for the M&A and describes the background of the two companies. Then it analyses the long-term performance of CITIC Securities before and after the acquisition. As for the financial indicators, the paper compares profitability, solvency, operating efficiency and growth capacity. In terms of non-financial indicators, it focuses on market share and number of business offices. Finally, it makes some suggestions for M&A in the Chinese securities industry. The paper finds that CITIC Securities' profitability, solvency and operating efficiency have all improved after the M&A, and the M&A has brought considerable gains. Its business offices in Guangdong operations have increased, and its market share has further expanded. In the future, CITIC Securities will need further follow-on integration to expand synergies and improve the company's performance.

Keywords

CITIC Securities, Guangzhou Securities, M&A, long-term performance

References

1. Calipha, R., Tarba, S., & Brock, D. (2010). Mergers and acquisitions: a review of phases, motives, and success factors. Advances in mergers and acquisitions, 9, 1-24.

2. Krishnakumar, D., & Sethi, M. (2012). Methodologies used to determine mergers and acquisitions’ performance. Academy of Accounting and Financial Studies Journal, 16(3), 75-91.

3. Yadong, C., Lee, L. C., Kee, P. L., & Quah, K. (2019). The impact of mergers and acquisitions on financial performance of listed companies in China. International Journal of Entrepreneurship, 2(8), 01-12.

4. Vinocur, E., Kiymaz, H., & Loughry, M. L. (2022). M&A capability and long-term firm performance: a strategic management perspective. Journal of Strategy and Management, (ahead-of-print).

5. Weber, Y., Tarba, S. Y., & Bachar, Z. R. (2011). Mergers and acquisitions performance paradox: the mediating role of integration approach. European Journal of International Management, 5(4), 373-393.

6. Zhang, J., Mu, Q., Teo, B. S. X., & Othman, J. (2022). Empirical Research Based on Chinese-Listed Companies Around the Performance of Corporate Mergers and Acquisitions. Cuadernos de Economía, 45(128), 124-131.

7. Zhu, Q., Li, X., Li, F., & Amirteimoori, A. (2021). Data-driven approach to find the best partner for merger and acquisitions in banking industry. Industrial Management & Data Systems, 121(4), 879-893.

8. Abdulwahab, B. A., & Ganguli, S. (2017). The Impact of Mergers and Acquisitions on Financial Performance of Banks in the Kingdom of Bahrain during 2004-15. Information Management and Business Review, 9(4), 34-45.

9. Reddy, K. S., Li, Y., & Xie, E. (2015). Economic transition and cross-border mergers & acquisitions: the Indian experience among BRICs. Journal of Comparative International Management, 18(2), 23-53.

10. Zhu, H., & Zhu, Q. (2016). Mergers and acquisitions by Chinese firms: A review and comparison with other mergers and acquisitions research in the leading journals. Asia Pacific Journal of Management, 33, 1107-1149.

Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License. Authors who publish this series agree to the following terms:

1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this series.

2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this series.

3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See Open Access Instruction).

Volume Title
Proceedings of the 7th International Conference on Economic Management and Green Development
ISBN (Print)
978-1-83558-101-8
ISBN (Online)
978-1-83558-102-5
Published Date
10 November 2023
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/40/20232005
Copyright
© 2023 The Author(s)
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated