Abstract: Using a sample of 522 merger events which occurred in Chinese A-share securities market from 2007 to 2011,we first empirically investigate the influences of enterprise political connection and competitive position on conglomerate merger decision by logistic regression,and further explore the mediating effect of the change of merging firm's competitive position on the relationship between political connection and corporate performance after conglomerate merger. The results indicate that:In contrast with related mergers,conglomerate mergers could hardly create value for shareholders. In the pre merger period,political connection is significantly positive correlated with conglomerate merger decision,and enterprise competitive position is negative correlated with conglomerate merger strategy. Further more,the worse corporate competition status is,the more likely political connection would lead to conglomerate merger. In the post conglomerate merger period,there exists a significantly positive relationship between political connection and post-merger performance,among which the promotion of merging firm's competitive position plays an important mediating effect. That is,conglomerate merger's political connection can firstly help improve its competitive status,which finally enhances its post-merger performance.