In order to avoid possible earnings management problems owing to using profit indicators, this paper chooses to build financial indicators based on free cash flow, selects 55 listed manufacturing companies in Shanghai and Shenzhen Stock Markets of AShare as research samples and uses factor analysis to make an empirical test on the performance of the merger and acquisition of sample firms from 2013 to 2016, and analyzes whether the merger and acquisition activities have a significant impact on the performance of the company. The results of the study indicate that the performance of companies in the year of merger and acquisition activity has increased significantly and declined in the two years after merger and acquisition activities, indicating that the merger and acquisition activity has no significant effects on the longterm performance of the company. Considering the research conclusions that merger and acquisition activities cannot have a longterm effects on company performance and the status of merger and acquisition in manufacturing, it is suggested that listed manufacturing companies should take their own development requirements into consideration, fully evaluate the cost and risk of the merger and acquisition activities, focus on resource integration after mergers and acquisitions activities, so as to achieve synergistic effect, improve supervision and incentive mechanisms, and avoid principal agent problem.