This paper attempts to provide more insights into the institutional investors' trading behavior around M&A announcements, in order to infer whether institutional investors have an informational advantage in M&A deals. In this paper, we examined the 182 samples of Taiwanese public companies that had announced M&A activity between 1997 and 2005, and a regression model was used to test hypotheses. The empirical results implied that the Dealers have a better grasp of the M&A information, the next is Foreign Institutional Investors. The Securities Investment Trust Companies are without held the informational advantage in M&A. This paper also demonstrated that there is a significant relationship between the change in institutional holdings and their original investment horizon. In addition, this paper found that firm size, financial leverage, past performance and industry factors had effect on the change in the institutional investors' holdings around the M&A announcement.