This paper examines the extent that takeovers of large, non-listed target firms create value in China. The baseline result shows that an average target's productivity improves and output increases after being acquired. Further evidence shows that the bidder's and target's ownership structure, economic development of the target's location and the bidder CEO's foreign experience all affect the target's post-takeover productivity. Our study sheds light on the merger and acquisition (M&A) literature in China that mainly focuses on the performance of bidders. It also has significant implications for the Chinese government to further reform and restructure its remaining state-owned assets.