The Financial Synergy Effect in M&A, Evidence From China's Real Estate Industry

In recent years, the number and scale of M&A (merger and acquisition) of real estate companies have increased. The article studies whether M&A of real estate companies can create financial synergies. The sample is A-share listed companies in the real estate industry that had M&A in 2009 and 2010. The duration of observation starts from the previous year before M&A and the following two years. With the factor analysis, we find that listed real estate companies achieve positive financial synergies in the short run but this effect is not long lasting. The acquirer should consider the strategic acquisition purpose and focus on the full range of merger integration process.