M&A

Mergers and acquisitions between enterprises

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Mergers and Acquisitions (M&A) includes merger and acquisition. It is customary in the world to merge and buy Together, they are called M&A and M&A in China. That is, the merger and acquisition between enterprises means that the enterprise legal person obtains other assets in a certain economic way on the basis of equality, voluntariness, equal value and compensation Legal person property rights The behavior of capital operation And a major form of operation. M&A mainly includes company merger Asset acquisition 、 Equity acquisition Three forms.

Chinese name: M&A
Foreign name: Mergers and Acquisitions^[2]

Include: Merger and acquisition have two meanings and two ways
General term: M&A

catalog

eleven M&A integration
twelve competitive power
thirteen Merger and acquisition of German enterprises

constitute

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because scale economy 、 transaction cost , undervaluation and Agency theory The rapid development of M&A Theory And practice has developed very rapidly, becoming one of the most active fields of western economics.

competitive edge

merger motivation The starting point of the theory is that the competitive advantage theory is due to the following three aspects:

First, the motivation of M&A is rooted in the pressure of competition. The acquirer improves its competitive strength by eliminating or controlling the other party in the competition.

Second, the existence of enterprise competitive advantage is the basis for the emergence of enterprise mergers and acquisitions. Through mergers and acquisitions, enterprises gain competitive advantage from the outside.

Thirdly, the realization process of M&A motivation is a two-way selection process of competitive advantages, and new competitive advantages are generated. When selecting the target enterprise, the acquirer aims at the specific advantages of the target enterprise he needs.

scale economy

classical economics and Industrial Organization Theory From different angles scale economy The pursuit of giving an explanation. Classical economics mainly demonstrates from the perspective of cost Enterprise economy The determination of scale depends on how large the scale can make Factory cost Enterprises including total cost minimum. The theory of industrial organization is mainly demonstrated from the theoretical aspect of market structure effect Industry economies of scale Many producers in the same industry should consider the comparison of competition cost and utility. M&A can obtain the property rights and assets , implement integrated operation and obtain Economies of scale 。

transaction cost

Under appropriate trading conditions Organizational costs It may be lower than the cost of carrying out the same transaction in the market, and the market is replaced by enterprises. Of course, the organizational costs will increase when the scale of enterprises expands. The boundary condition considering the scale of mergers and acquisitions is that the increase in the marginal organizational costs of enterprises is equal to the margin of enterprises transaction cost Reduction of. stay Asset specificity Under the circumstances, enterprises that need some kind of intermediate product input tend to implement mergers and acquisitions on enterprises that produce intermediate products, so that enterprises as trading partners can be transferred into the enterprise. stay policy decision Under the separation of functions, the organization and management of multiple departments are not related to economic activities administration cost It is lower than the transaction cost of these unrelated economic activities through the market, so the organizers of multiple departments are regarded as one Internalization After management coordination replaces market coordination, the capital market can be internalized. Through unified strategic decisions, capital from different sources can be concentrated and invested in high profit sectors, thus greatly improving the efficiency of resource utilization. In terms of scientific analysis of this effect, modern Financial Theory And the development of practice information processing technology It promotes the development of financial theory of enterprise M&A, and also provides an effective means for quantifying the impact of M&A on various economic factors, implementing a series of financial analysis of profit and loss, and evaluating enterprise M&A programs.

agent

Jason and Maklin (1976) ownership Structure agency cost , including the cost of signing a contract between the owner and the agent, the supervision of the agent and Control costs M&A can reduce the agency cost. Through fair acquisition or proxy fight, the current manager of the company will be replaced, and the takeover threat under the merger mechanism will reduce the agency cost.

Undervalue

M&A occurs mainly because the value of the target company is underestimated. There are three main reasons for underestimation: the economic management ability does not play its due potential; The acquirer has internal information about the true value of the target company that is not available in the external market, and believes that the acquisition will yield benefits; because inflation And other reasons assets The difference between the market value of Stock market price It is less than the total replacement cost of the enterprise, and the possibility of M&A is high. Undervaluation theory It is predicted that under the circumstances of rapid technological changes, unstable market conditions and economy, enterprises will have frequent M&A activities.

As far as the research progress of China's M&A financial issues is concerned, most of them are M&A motivation Theoretical research, mainly from the perspective of enterprise management, focuses on scale economy , buying a shell to go public, improving management efficiency and other business management motivations, and less research on financial incentives such as financial expectations and value appreciation. As for the financial analysis of M&A, the focus of the theoretical circle is enterprise pricing free cash flow 、 discount Cash flow Rappaport model , pricing models for different payment methods, and Market law And other complex pricing methods cash flow In terms of composition Risk measurement Less involved. about M&A financing It just draws lessons from western theories and does not integrate with China's reality deeply. For the integration after M&A, most of them focus on institutional innovation and corporate culture, and seldom discuss risk prevention. Multi index regression analysis is used for M&A performance evaluation, which is more complicated.

It is necessary to study the financial management of M&A, hoping to provide some reference for standardizing M&A behavior, institutionalizing M&A, and providing beneficial exploration and ideas for both sides of M&A. With China's socialism market economy The gradual establishment of the system, and modern enterprise system Establishment of, Capital concentration It has become the internal requirement for enterprises to expand their scale, and M&A is just a choice to achieve this goal. M&A must focus on certain economic benefits. A successful M&A activity can lead to expansion of production scale, enhancement of market control ability, entry into new industries or markets, etc synergistic effect 。 Under the condition of market economy, as a special commodity, enterprises can Property transaction Market, securities market). Many Chinese enterprises do not operate well, the mechanism is not active, and some even go bankrupt, which objectively provides the possibility for enterprise mergers and acquisitions. get nobel prize in economics In his research, Professor Stegel of assets Joint operation, merger, acquisition, equity participation Holding That is to say, M&A has become an important way for enterprises to achieve extraordinary development. Whether listed company Or investors, as well as intermediaries and government regulators, have paid close attention to the development of mergers and acquisitions. The company acquires shares through property rights transactions, thus obtaining significant business for other companies Financial decision Or exert certain influence to enhance economic strength and realize Financial management objectives 。

M&A is promoting China's economic development and Enterprise restructuring It plays an indelible role, but it does not meet people's expectations. The reasons are certainly manifested in positioning errors, administrative intervention, neglect of integration, etc., but the lag of financial accounting work is an important issue that cannot be ignored. Compared with foreign countries, China is still in the initial stage in terms of financial issues in enterprise mergers and acquisitions. The theoretical circle has recognized the importance of the issue. Some researchers use foreign practices for reference in mergers and acquisitions motivation 、 Enterprise value assessment 、 M&A financing And other related issues have been explored, but no consensus has been reached, which needs further study. In China, whether entering WTO or establishing a modern enterprise system, enterprises will face mergers and acquisitions economic behavior 。 This requires an in-depth study of the financial issues of enterprise mergers and acquisitions.

Corporate M&A concept

M&A, Company merger and acquisition， It refers to the merger of two or more independent enterprises and companies to form a single enterprise. Usually, one dominant company absorbs one or more companies.

Introduction to M&A

Mergers and acquisitions of companies can be classified into broad sense and narrow sense.

1. Merger and acquisition in a narrow sense refers to the economic behavior that an enterprise acquires the property rights of other enterprises through property rights transactions, which deprives these enterprises of their legal personality, and obtains the right to control the operation and management of enterprises. This is equivalent to merger by absorption《 Encyclopedia of Great Britain 》The definition of merger is similar.

2. Merger and acquisition in a broad sense means that an enterprise acquires the property rights of other enterprises through property rights transactions and attempts to gain control over them, but these enterprises do not necessarily lose their legal personality. The broad sense of merger includes the narrow sense of merger and acquisition. Interim Measures on Enterprise Merger《 Detailed Rules for the Implementation of the Measures for the Administration of State owned Assets Appraisal 》Both the Interim Provisions on Financial Issues Related to Enterprise Merger and the Interim Provisions on Financial Issues related to Enterprise Merger adopt the concept of merger in a broad sense.

M&A of listed companies

The financial advisory business for mergers and acquisitions of listed companies refers to the provision of professional services such as transaction valuation, scheme design, and professional advice for mergers and acquisitions of listed companies, major asset restructuring, mergers, divisions, share repurchases and other mergers and acquisitions that have a significant impact on the equity structure, assets and liabilities, income and profits of listed companies.

through China Securities Regulatory Commission (hereinafter referred to as the "CSRC") has approved that securities companies, securities investment consulting institutions or other qualified financial advisory institutions (hereinafter referred to as the "financial advisers") that have the qualification of financial advisory business for mergers and acquisitions of listed companies may engage in financial advisory business for mergers and acquisitions of listed companies in accordance with the provisions of these Measures.^[1]

Merger and acquisition plan

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method

Methods of company merger and acquisition:

(1) To purchase the assets of other companies with cash or securities in the process of merger and acquisition;

(2) Purchase of shares or stocks of other companies through company mergers and acquisitions;

(3) Issue new shares to shareholders of other companies in exchange for their equity, so as to acquire assets and liabilities of other companies. "

condition

Mergers and acquisitions of companies include the following main conditions:

(1) The status agreement of the parties involved in the merger and acquisition of the company, including the name (name), domicile, name, position, legal representative of nationality, etc;

(2) Purchase or subscription of shares and share capital by merger and acquisition of the company to increase the price;

(3) The agreement period of the implemented performance mode;

(4) Parties to the agreement on rights and obligations;

(5) Liability for breach of contract and dispute settlement;

(6) At the time and place of signing the agreement.

M&A

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Corporate M&A can be divided into many categories, such as SP company M&A, Internet company M&A, ICP company M&A, online game company M&A, telecom SMS company M&A, mobile SMS company M&A, Unicom SMS company M&A, WAP company M&A, technology company M&A.

SP Company

The M&A of SP Company is divided into the sale of SP Company and the acquisition of SP Company. Generally, the sale of SP Company is Shell company After the acquisition of SP company, it can directly operate the business of SP company, which is equivalent to adding a branch company with SP operation qualification on the basis of the company.

Conditions for merger and acquisition of SP Company:

1. First of all, SP sold the company with a registered capital of 10 million yuan.

2. Secondly, SP Company should not sell its registered capital for technology investment or other investment situations.

3. The business address of the selling company of SP Company shall not be different from the registered address.

4. The acquisition of SP company applied for is a domestic company, and it is not recommended to apply if there are corporate shares in it and the corporate shares have foreign background.

5. The acquisition of SP company must be for the above technical personnel, sign labor contracts, and provide social insurance.

6. The acquisition company of SP Company has relevant technical personnel, and at least 10 technical personnel.

7. It is recommended not to apply for the acquisition of SP company with radio and television background.

Internet companies

M&A of Internet companies refers to the acquisition and merger of shell companies with Internet business licenses, so as to operate the relevant businesses of the Internet companies acquired accordingly.

M&A content of Internet companies:

1. The registered capital of the Internet company acquirer is 10 million yuan.

2. The company address of the acquirer of the Internet company cannot be the same as that of the seller of the Internet company.

3. The acquirer of an Internet company must have 10 relevant technical personnel.

4. Both parties to the merger of Internet companies must provide personnel Social security certificate 。

5. The seller of an Internet company must be a domestic company.

ICP

ICP M&A refers to the acquisition and merger of companies with ICP licenses, with the purpose of directly operating the related businesses of ICP sellers.

Steps of ICP company acquisition: ICP company acquisition parties and creditor representatives of the target company formed a team to draft and pass the ICP company acquisition implementation plan, and the creditors reached an agreement with the acquired ICP company Debt restructuring agreement , agreed on the debt repayment after the acquisition, the formal negotiation between the two acquirers, negotiated and signed the acquisition contract, and the two parties submitted to their respective authorities in accordance with the Articles of Association of the ICP Company Seller or the ICP Company Seller Company Law and relevant supporting regulations. If the shareholders' meeting deliberated and voted on the acquisition, and in accordance with the requirements of laws and regulations, The ICP Company's acquisition contract will be submitted to relevant departments for approval or filing. After the ICP Company's acquisition contract comes into effect, both parties will perform asset transfer according to the contract Operation and management right Unless otherwise provided by law, the transfer procedures shall go through the procedures of industrial and commercial registration and tax registration change, including shareholder change registration. Transfer of state-owned equity It shall be publicly conducted in a legally established property rights trading institution, and the entrusted trading institution shall publish the announcement of equity transfer on the economic or financial newspapers and websites of property rights trading institutions that are publicly issued at or above the provincial level, publicly disclose information about state-owned equity transfer, and widely solicit the transferee. The transfer methods include auction, bidding, agreement transfer, etc. So far, the acquisition of ICP Company has been completed.

Online game company

The merger and acquisition of online game companies refers to the merger and acquisition of companies that have complete relevant procedures such as online culture business licenses, so that they can directly operate the business of the companies they have acquired,

Merger and acquisition methods of online game companies:

1. Online game company acquirers need a good platform to find the required online game company sellers.

2. There are two forms of acquisition of online game companies: asset acquisition and equity acquisition.

Asset acquisition refers to the act that an enterprise controls another enterprise by acquiring its assets. Equity acquisition refers to the act that an enterprise acquires the equity of another enterprise to control the enterprise.

According to the proportion of the acquirer of online game companies in the acquiree's equity share, equity acquisition can be divided into holding acquisition and comprehensive acquisition. Holding acquisition means that although the acquirer of online game company has not acquired all the equity of the acquiree, the equity acquired by its online game company is sufficient to control the operation and management of the acquiree. Holding acquisition can be divided into absolute holding acquisition and relative holding acquisition. If the acquirer holds 51% or more of the equity of the acquiree, it is an absolute holding acquisition. If the seller of an online game company holds 50% or less of the equity of the acquiree but can hold a controlling stake, it is a relative holding acquisition. The sale of comprehensive online game company indicates that the seller acquires all the shares of the acquiree, and the acquiree becomes a wholly-owned subsidiary of the seller of online game company.

WAP company

WAP M&A is the abbreviation of Wireless Application Protocol. This is a security standard that enables users to obtain information by means of wireless handheld devices, such as handheld computers, mobile phones, pagers, two-way radios, smart phones, etc. The acquisition of WAP companies is the acquisition of companies with WAP operation qualifications, so that they can operate the related businesses of the sellers of WAP companies.

WAP company acquisition method: WAP company acquisition requires certain skills. Not many companies with WAP business sell. This requires a good platform to acquire WAP companies. A good WAP company acquisition platform will help filter out many bad aspects of the company, such as tax settlement and debt liquidation.

Business license

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Company merger and acquisition business license

A securities company engaged in the financial advisory business of mergers and acquisitions of listed companies shall meet the following conditions:

（1） The net capital of the Company complies with the provisions of the CSRC;

（2） Have a sound and well functioning internal control mechanism and management system, and strictly implement the risk control and internal isolation system;

（3） Establish a sound due diligence system with good Project risk assessment And kernel mechanism;

（4） The Company's financial and accounting information is true, accurate and complete;

（5） The controlling shareholders and actual controllers of the Company have good reputation and no record of major violations;

（6） The number of sponsors of financial advisers shall not be less than 5;

（7） Other conditions stipulated by the CSRC.^[1]

Company merger and acquisition supervision system

According to the provisions of the CSRC on mergers and acquisitions, the financial adviser shall bear the responsibility of continuous supervision within the specified period after the acquisition of listed companies, major asset restructuring, issuing shares to purchase assets, merger and other matters are completed.

The financial consultant shall, through daily communication, regular return visits and other means, and in combination with the disclosure of the regular reports of the listed company, do the following continuous supervision:

（1） Urge the parties involved in the merger and reorganization to implement the merger and reorganization plan in accordance with relevant procedures and specifications, handle the property rights transfer procedures in a timely manner, and perform the obligations of reporting and information disclosure according to law;

（2） Urge listed companies to comply with《 Corporate Governance Standards for Listed Companies 》To standardize the operation;

（3） Urge and inspect the performance of the declarant's commitment to market disclosure;

（4） Urge and inspect the declarant to implement the follow-up plan and other relevant obligations agreed in the merger and reorganization plan;

（5） In combination with the regular reports of listed companies, check whether the merger and reorganization is carried out as planned and whether the expected goals are achieved; Whether the implementation effect is significantly different from the previously announced professional opinions, and whether the relevant profit forecast or the performance goals expected by the management have been achieved;

（6） Other matters required by the CSRC.

During the period of continuous supervision, the financial consultant shall issue continuous supervision opinions in combination with the regular reports disclosed by the listed company, and report to the local agency of the CSRC where the listed company is located within 15 days after the disclosure of the aforesaid regular reports.^[1]

essence

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The essence of M&A is a kind of right transfer behavior conducted by all right subjects according to the institutional arrangements made by the enterprise property rights in the process of the enterprise control movement. M&A activities are carried out under certain conditions of property rights system and enterprise system. In the process of M&A, one or part of the right subjects obtain corresponding benefits by transferring their control over the enterprise, while the other part of the right subjects obtain this control by paying a certain price. The process of enterprise merger and acquisition is essentially a process of continuous transformation of the main body of enterprise rights.

form

I. From the perspective of industry, M&A can be divided into the following three categories:

1、 Horizontal M&A 。 Horizontal mergers and acquisitions refer to mergers and acquisitions between enterprises belonging to the same industry or industry, or whose products are in the same market. Horizontal mergers and acquisitions can expand the production scale of similar products, reduce production costs, eliminate competition and increase market share.

2、 Vertical M&A 。 Vertical M&A refers to the M&A between enterprises closely related to the production process or business links. Vertical M&A can accelerate the production process and save transportation, warehousing and other costs.

M&A

3、 Mixed M&A 。 Mixed M&A refers to the M&A between enterprises that produce and operate unrelated products or services. The main purpose of mixed M&A is to diversify business risks and improve the market adaptability of enterprises.

II. According to the payment methods of enterprise mergers and acquisitions, mergers and acquisitions can be divided into the following ways:

1. Purchase with cash assets 。 It means that the acquiring company uses cash to purchase most or all of the assets of the target company to control the target company.

2. Purchase stocks with cash. It means that the acquiring company purchases most or all of the shares of the target company in cash to control the target company.

3. Purchase assets with stocks. It means that the acquiring company issues its own shares to the target company in exchange for most or all of the target company's assets.

4. Exchange shares for shares. This kind of M&A is also called“ Share exchange ”。 Generally, the M&A company directly reports to the target company shareholder The issue of shares in exchange for most or all of the shares of the target company, usually up to the number of shares held. Through this form of M&A, the target company will often become the subsidiary 。

The upsurge of mergers and acquisitions

5、 Creditor's rights Equity transfer method. Debt to equity M&A refers to the largest creditor When the enterprise is unable to repay its debts, the creditor's rights will be converted into investment, so as to gain control of the enterprise. China Finance Asset management company Most of the enterprises under control are Debt to equity swap However, asset management companies hold shares in stages and will eventually hold Equity transfer Realize. 6、 Indirect holding 。 Mainly strategic investment Through direct merger and acquisition of the largest shareholder of the listed company, it indirectly obtains the control of the listed company. for example Beijing Wanhui Pharmaceutical Group Acquired the largest shareholder of Shuanghe Pharmaceutical by way of debt commitment Beijing Pharmaceutical Factory Thus holding 175.24 million shares of Shuanghe Pharmaceutical, accounting for 57.33% of the total share capital of Shuanghe Pharmaceutical, becoming the largest shareholder of Shuanghe Pharmaceutical.

7. Debt bearing M&A. It means that the M&A enterprise acquires the target by fully undertaking the creditor's rights and debts of the target enterprise Enterprise control 。 Most of these target enterprises are Insolvency , M&A Enterprise acquisition After injection, flow assets Or high-quality assets, making the enterprise turn loss into profit.

8. Free transfer. It refers to the local government or competent department acting as state-owned shares The shareholding unit of Investor The act of transferring between. Helps reduce internal competition among state-owned enterprises, and forms International competitiveness A large company or group. It has a strong government color. Such as FAW's acquisition of Jinbei state share 。

III. According to the behavior of M&A enterprises, it can be divided into bona fide M&A and Hostile M&A 。 The bona fide M&A is mainly through friendly negotiation and mutual cooperation between the two parties to formulate the M&A agreement. Hostile M&A means that the M&A enterprise secretly acquires the shares of the target enterprise, and finally makes the target enterprise have to accept the conditions of sale, so as to realize the transfer of control.

agent

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As a capital organization, an enterprise must seek the maximum appreciation of capital. As an important Investment activities The driving force is mainly from the pursuit of maximum capital appreciation motivation , and factors such as competitive pressure, but as far as the M&A behavior of a single enterprise is concerned, there will be different motivations and different specific manifestations in real life. Different enterprises will determine the motivation of M&A according to their own development strategies.

effect

Based on the general theory of M&A motivation, many specific M&A effect motivations are proposed. Mainly:

(1) Weston synergy

This theory believes that M&A will improve the production and operation efficiency of enterprises, and the most obvious role is Economies of scale It is often called the effect of 1+1>2.

⑵ Market share effect Through M&A, enterprises' ability to control the market can be improved. Through horizontal M&A, the minimum scale specified by the industry can be reached, which improves the Industry structure . It has improved the concentration degree of the industry and kept the enterprises in the industry at a high profit rate level; Vertical M&A is to control the activities of competitors through the control of raw materials and sales channels; Mixed M&A pair Market power The impact of M&A is indirect, and the absolute size and sufficient financial resources of enterprises after M&A pose a greater competitive threat to enterprises in their related fields.

⑶ Empirical cost curve effect

The experience includes the expertise of the enterprise in technology, market, patents, products, management and corporate culture. Since the experience cannot be copied, the experience of the target enterprise can be shared through mergers and acquisitions, reducing the learning costs of enterprises for accumulating experience, and saving enterprise development costs. In some enterprises with high requirements for labor quality, experience is often effective Barriers to entry 。

⑷ Financial synergy M&A will bring financial benefits to the enterprise. This benefit is obtained due to the role of tax laws, accounting practices and the internal provisions of securities transactions, which mainly include Tax effect That is, through M&A, we can achieve reasonable tax avoidance. The expected effect of stock price is that M&A makes stock market Changes in enterprise stock evaluation Stock price , the acquirer can choose P/E ratio And price returns are lower, but higher Earnings per share As the target of M&A.

commonly

There are two direct motivations for M&A: first, maximize the holding of existing shareholders stock right Market value; The second is to maximize the wealth of existing managers. While increasing enterprise value is the basis for achieving these two goals, the general motivation of enterprise mergers and acquisitions is reflected in the following aspects:

(1) Access to strategic opportunities

One of the motivations of acquirers is to buy future development opportunities. When an enterprise decides to expand its operation in a specific industry, an important strategy is to merge existing enterprises in that industry, rather than relying on its own internal development. The reasons are as follows: First, we can directly obtain the development and research department in operation to gain time advantage and avoid the delay of factory construction; Reduce one competitor and gain its position in the industry directly. Another strategic motivation of enterprise M&A is Market power The two enterprises adopt the unified Price policy , which can make their income higher than that of competition. A large amount of information resources may be used to disclose strategic opportunities, and financial information may play a key role. For example, accounting income data may be used to evaluate the profitability of enterprises in the industry; It can be used to evaluate changes in industry profitability, which is very meaningful for enterprise mergers and acquisitions.

(2) Give play to synergy

It mainly comes from the following fields: Production field , can generate Economies of scale , can accept new technology, can reduce the possibility of supply shortage, can make full use of unused production capacity; In the field of market and distribution, economies of scale can also be generated, which is the way to enter new markets, expand existing distribution networks, and increase product market control; In the financial field, make full use of unused Tax benefits , develop unused debt capacity; In the personnel field, key management skills are absorbed to integrate multiple research and development departments.

⑶ Improve management efficiency

One is that the managers of enterprises operate in a non-standard way. When they are acquired by more efficient enterprises, they will replace the managers to improve the management efficiency. When the managers' own interests are better coordinated with the interests of existing shareholders, the management efficiency can be improved. If leverage purchase is adopted, the wealth composition of existing managers depends on the financial success of enterprises, At this time, managers focus on maximizing the market value of enterprises. In addition, if a enterprise mergers Another enterprise, then sell some assets Take back all the purchase value, and obtain the remaining assets at zero cost, so that the enterprise can benefit from the capital market.

⑷ Obtain Economies of scale Corporate scale economy Is created by Economies of production scale And management economies of scale. The economies of scale of production mainly include: Productive capital Make supplements and adjustments to meet the requirements of economies of scale, and implement specialized production in each subsidiary while maintaining the overall product structure. Management economies of scale are mainly manifested in: because management costs can be shared in a larger range Unit product The administrative expenses of. We can concentrate human, material and financial resources on the development of new technologies and products.

(5) Buying a shell for listing

China has strict approval for listed companies, and listing qualification is also a resource. Some mergers and acquisitions are not for the purpose of obtaining the listing qualification of the target enterprise itself, but for the purpose of obtaining the listing qualification of the target enterprise. By going abroad to buy a shell for listing, enterprises can raise funds abroad to enter the foreign market. China Ocean Shipping Group has successfully bought shell and listed overseas for many times, holding COSCO Pacific and COSCO International in Hong Kong. COSCO Group (Shanghai) Real Estate Development Co., Ltd. spent 145 million yuan to purchase the initiator of Shanghai Zhongcheng Industrial Co., Ltd. with 28.7% of the shares in a one-time agreement Corporate Stock , achieve the purpose of holding shares and successfully enter China capital operation Market.

In addition, M&A reduces barriers to entering new industries and markets. For example, in order to expand its business in Shanghai and occupy the market, Hengtong purchased the state-owned shares of Shanghai Linguang Industry at a lower price through an agreement, so as to achieve the purpose of controlling shares and successfully develop its business in Shanghai; It can also use the resources of the acquired party, including the preferential policies enjoyed by equipment, personnel and target enterprises; Under the pressure of market competition, enterprises need to constantly strengthen their competitiveness, explore new business areas and reduce operational risks.

As the internal driving force and the manifestation of external pressure for the development of enterprises, M&A plays a major role in that the overall benefits of enterprises exceed the two independence before M&A Enterprise benefits Summative Business synergy ； A kind of financial synergy effect on pure currency revenue and expenditure due to the role of tax law and the investment concept of the securities market; It can realize the main business transfer and other development strategies of the enterprise. Successful M&A can enliven some listed companies and non listed companies, help improve the overall quality of listed companies and expand the radiation of the securities market to all enterprises and the overall economy; M&A can strengthen the Market awareness , clarify the responsibilities of both sides and give full play to their initiative to truly realize Separation of government and enterprises ； M&A creates profit opportunities for investors and enlivens the securities market; Is conducive to adjusting the industrial structure, Optimize resource allocation , transformation Economic growth mode 。

Financial drivers

In the West, there are various theoretical explanations for enterprise mergers and acquisitions. Some theories believe that effective Financial activities So as to improve the efficiency and possibly generate extraordinary benefits. Some people analyze the signals of the securities market and believe that the stock acquisition transmits the information that the target company is undervalued, which will cause the stock of the acquirer and the target company to rise. Integrating various theories, Enterprise property rights In the transaction flow, follow the law of value, the law of supply and demand, and the law of competition, so that the production factors flow to the regions and industries where they are most needed and can produce the most benefits. At the same time, consider a pure currency benefit due to the internal laws such as taxation, accounting practices, and securities transactions. Therefore, the financial motivations of enterprise property rights M&A include the following aspects.

1、 Tax avoidance factors

As dividend income, interest income, operating income and Capital gains There is a large difference in tax rates between the two companies, so adopting appropriate financial treatment methods in M&A can achieve the effect of reasonable tax avoidance. The tax law stipulates the provision of loss deferral. Enterprises with large profits often consider those enterprises with a considerable amount of accumulated losses as merger objects. The increase of tax income as the cash inflow of enterprises can increase the value of enterprises. The surplus of enterprise cash flow is used in the following ways: additional dividends, securities investment, share repurchase, and acquisition of other enterprises. If dividends are paid, the shareholders will pay more than the Securities transaction tax Higher income taxes; securities The yield is not high; Buying back shares is easy to improve the stock market and increase costs. And purchase with surplus funds Business to business And shareholders will generate certain tax returns. In the share exchange acquisition. The acquiring company received neither cash nor capital gains, so this process is tax exempt. Enterprise passes assets Flow and transfer Asset Owner Realize the purpose of additional investment and asset diversification, and the acquirer can convert by issuing bond In exchange for shares of the target enterprise, these bonds are converted into shares after a period of time. such Issuance of bonds On the other hand, enterprises can retain the capital gains of these bonds until they are converted into shares. The deferred payment of capital gains can make enterprises pay less capital gains tax.

2、 Financing

Merger and acquisition of an enterprise with a large surplus of funds but a low stock market price can simultaneously obtain its funds to make up for its own lack of funds. Financing is a common problem faced by fast-growing enterprises. Trying to unite with an enterprise with sufficient funds is an effective solution assets The replacement cost of is usually higher than its market price. In M&A, enterprises are keen to acquire other enterprises instead of replacing assets. efficient market Under conditions, reflect Enterprise economy The value is the market value based on the profitability of the enterprise rather than book value The selling value of the assets of the merged enterprise is often low, the management efficiency of the enterprise after the merger is improved, and the functional departments are reorganized to reduce the relevant costs. These are favorable conditions for M&A financing. At present, the technological transformation implemented by many state-owned enterprises urgently needs a large amount of development capital investment. Therefore, the form of property rights flow is adopted to make enterprise assets recombine in different ways, activate the stock to reduce investment, and quickly form new productivity. For example, those registered and listed in Hong Kong Shanghai Industrial Holding Co., Ltd The company acquired Shanghai Xiafei Household Chemical Co., Ltd. with 60 million yuan to explore a new way for Chinese enterprises to indirectly use foreign capital to develop domestic brands. Although Xiafei has the advantage of well-known trademarks, it still develops slowly due to lack of funds. After the merger and acquisition is completed, a company registered in Hong Kong will be used as a way to finance overseas.

3、 Enterprise value appreciation

Generally, the P/E ratio of the stock of the acquired enterprise is low, lower than that of the acquirer, so that the P/E ratio will remain at a high level after the completion of the merger. The rise of the stock price will improve the earnings per share and enhance the value of shareholders' wealth. Therefore, after the implementation of enterprise mergers and acquisitions, the absolute and relative size of the enterprise will be expanded and controlled Cost price , production technology and Source of funds and Customer purchase behavior It can reduce enterprise risk and improve the safety degree and the total profit of the enterprise in the case of sudden changes in the market. At the same time, the credit rating of enterprises has risen and the financing cost has declined, which reflects in the securities market that the stock prices of both parties to the merger and acquisition have risen, the enterprise value has increased, and the financial expectation effect has been generated.

4、 Access to the capital market

The reform of China's financial system and the strengthening of international economic integration have made Financing channels Greatly expanded to the securities market and international financial market Many enterprises with good performance often invest in capital operation And seek mergers and acquisitions.

5、 Speculation

Non productive income generated from securities transactions, accounting treatment, tax treatment, etc. of enterprise mergers and acquisitions can be improved Enterprise financial situation At the same time, it also encourages speculation. In the process of foreign M&A in China, speculation is increasing equity market Acquire the equity of the target enterprise, and then assets Sell, then rectify the target company and sell it at a high price, making full use of the undervalued assets to obtain M&A income.

6、 Financial expected effect

The stock price is affected by the change of the stock market's evaluation of the enterprise's stock during the merger and acquisition Stock speculation And stock speculation promotes M&A. Generally, the stock price will not change significantly in a short period of time. Only when the P/E ratio or profit growth rate of the enterprise has greatly increased, the price to income ratio will increase. However, once there is a merger and acquisition, the market will raise the evaluation of the company, which will cause the stock prices of both parties to rise. Enterprises can improve their earnings per share and keep the stock price rising by merging and acquiring enterprises with lower price earnings ratio but higher earnings per share. In the upsurge of M&A in the United States, the role of the expected effect makes M&A often accompanied by speculation and sharp stock price fluctuations.

7、 Pursue profit

Enterprise profit The realization of the enterprise depends on the market. Only when the goods and services provided by the enterprise are accepted by customers in the market, and the goods and services are converted into money, can profits be truly realized. And Profit maximization What is related is the maximization of the market share of the enterprise. Due to the development of production internationalization, market internationalization and capital internationalization, the market of some industries is expanding day by day. Mergers and acquisitions of enterprises in these industries are to meet the challenges of international open markets.

basic principle

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Enterprises should make decisions based on or cost-benefit analysis when conducting mergers and acquisitions. Its basic principles are Net acquisition income Generally, it should be greater than zero, so that M&A can be profitable to achieve the goal of maximizing shareholder wealth. The calculation of the net proceeds of M&A can usually be carried out in the following ways: first, calculate the proceeds of M&A, which should be the balance of the overall value of the new company after M&A minus the overall value of the acquirer and the acquiree (the target company) before M&A. I.e

M&A income=value of new company after M&A - (value of acquirer before M&A+value of acquiree before M&A)

For example, if Company A merges with Company B, the value of Company A before the merger is 300 million yuan, and that of Company B is 100 million yuan. After the merger of Company A and Company B, Company AB is formed. The value of Company AB is 600 million yuan, so the acquisition income is 200 million yuan. The calculation process is as follows:

M&A income=6 - (3+1)=2 (100 million yuan)

Secondly, on the basis of M&A income, the balance after deducting the M&A premium paid for the M&A of the acquired company (i.e. the difference between the M&A price and the value of the acquired party before the M&A) and the M&A expenses incurred for the M&A activities such as lawyers, consultants and negotiations is the net income of M&A. The calculation formula is as follows:

Net acquisition income=acquisition income - acquisition premium - acquisition expense

Tax risk

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M&A

There are many motivations for M&A, which can be to pursue scale economy It can be to achieve diversified operation, or to obtain advanced technology and management experience, but its goal is only one, that is, to maximize the profits of the enterprise. and tax revenue The problem directly affects the realization of enterprise profits. If the tax payment of enterprises is not accurately reviewed before the merger, the enterprises after the merger will bear unnecessary risks. Therefore, in the process of M&A, how to prevent tax related risks is a problem that all M&A parties should pay attention to.

One of the risks

That is, the outstanding tax liability of the target enterprise before the merger is inherited by the merged enterprise, and the tax liability of the merged enterprise is increased tax burden 。

If the merger is conducted in the form of corporate merger, according to China《 company law 》Article 175 stipulates that when a company is merged, the creditor's rights and debts of all parties to the merger shall be inherited by the surviving company or the newly established company after the merger. Therefore, if the company before the merger has taxes payable but not paid, after the merger, due to the existence of the inheritance relationship, the merged enterprise will face the risk of assuming the tax liability of the enterprise before the merger.

Risk 2

That is, the outstanding tax obligations of the target enterprise before the merger will directly affect the financial status of the enterprise after the merger.

If you use Asset acquisition or Equity acquisition M&A in the form of and under the same and non same control Holding merger , will also produce a series of tax revenue Question. First, after an enterprise obtains control of the target enterprise through asset acquisition, equity acquisition and holding merger, according to the Accounting Standards for Business Enterprises No. 2 - Long term equity investment 》If the investing enterprise has joint control or significant influence over the invested entity, Long term equity investment Should use Equity method Accounting. Therefore, the profit and loss changes of the target enterprise may affect the profit and loss of the enterprise after the merger to a large extent. If the target enterprise before the merger fails to fulfill its due tax obligations and then performs after the merger, it will certainly reduce the profit and loss of the enterprise after the merger. Second, after the merger, the enterprise group consolidates its financial statements in accordance with the Interim Provisions on Consolidated Financial Statements and the Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements. In this case, the outstanding tax obligations before the merger will even affect the financial status of the entire enterprise group.

Risk 3

That is, before M&A, the target enterprise should have fulfilled its tax obligations but failed to do so, which will falsely increase the tax liabilities of the target enterprise Net assets Increase the acquisition cost of the acquired enterprise.

If the target enterprise has an outstanding tax liability, the tax liability is actually a liability to the country, but it has not yet Accounting statements Embodied in. This directly leads to the Shareholders' equity False increase, the acquisition enterprise will pay more than its actual net assets Acquisition consideration , increased acquisition costs.

Risk 4

That is to say, before the merger and acquisition, the target enterprise does not calculate the relevant tax related matters, which will not only increase the acquisition cost of the acquired enterprise, but also increase the tax burden of the enterprise after the merger and acquisition.

If the target enterprise has accrued but not accrued expenses, accrued but not accrued depreciation, and amortized but not amortized assets . The losses that can be made up in subsequent years are not counted, and the time limit is not counted Tax preference In the case of amount, there will be two consequences in the merger and acquisition of enterprises: first, if the target enterprise has the situation of accrued expenses, accrued depreciation, and amortized assets, the shareholders' equity of the target enterprise will be inflated, and the acquisition cost of the acquired enterprise will be increased; Second, according to treasury department 、 State Administration of Taxation About Enterprise restructuring Notice on Issues Concerning the Treatment of Business Enterprise Income Tax (CS [2009] No. 59) Income tax liquidation And select special tax treatment business combination The combined enterprise can make up for the loss of the combined enterprise within the limit. The document also stipulates that Absorption and merger In the case that the nature of the surviving enterprise after the merger and the conditions for applying the tax preference have not changed, the enterprise can continue to enjoy the benefits before the merger Residual maturity Tax preference. Therefore, the target enterprise has a deficit that can be made up in the following years and a period that is not counted and not counted Tax preference If the situation is serious, the enterprise may enjoy less after M&A assets The inherited tax rights and interests, on the other hand, increase the tax burden of enterprises after mergers and acquisitions.

As mentioned above, no matter what method of M&A is adopted, if the enterprise before M&A has major tax related violations, even if it was not investigated and dealt with by the tax authorities at that time, once it is found out after M&A, the surviving or newly established enterprise after M&A will bear a huge amount of property loss Or loss of shareholders' equity, or even reputation damage. Then, the current tax law of China Taxes How is the issue of the pursuit of?

According to the provisions of the second and third paragraphs of Article 52 of the Tax Administration Law, if the tax is not paid or underpaid due to errors in the calculation of taxpayers and withholding agents, the tax authorities can recover the tax and late fees within three years; Under special circumstances (Article 82 of the Detailed Rules for the Implementation of the Tax Administration Law defines that taxpayers or withholding agents have failed to pay or underpaid, failed to withhold or underpaid, failed to collect or underpaid taxes due to errors in calculation, and the cumulative amount is more than 100000 yuan), the recovery period can be extended to five years. Where a person evades, refuses to pay taxes or defrauds taxes, the tax authorities shall not be subject to the limitation of the time limit prescribed in the preceding paragraph, that is, to pursue the collection of the tax he has failed to pay or underpaid, or the tax he has failed to pay or the tax he has defrauded, that is, to pursue the collection of the tax indefinitely. In addition, it involves corporate income tax Special tax adjustment According to the Regulations on the Implementation of the Enterprise Income Tax Law, the tax authorities have the right to make tax adjustment within 10 years from the tax year in which the relevant business occurs.

accounting treatment

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The choice of accounting methods for M&A has always been one of the most controversial issues in accounting circles. China's major consumer electronics and mobile phone manufacturers on January 30, 2004 TCL Group In Shenzhen Share exchange merger To complete its IPO (IPO), raising 2.51 billion yuan. TCL Group The combination of equity method was used in the accounting treatment of this M&A, which again aroused great concern in the industry. In China, the standards in this regard have not yet been issued. To understand this problem, we should first clarify the classification of business combinations and the relationship with accounting.

Classification of enterprise mergers and acquisitions

one Classification of mergers and acquisitions by legal form

Mergers and acquisitions are divided into Absorption and merger 、 Create a merger and Holding merger 。

1. Merger by absorption. Merger by absorption, also known as merger, refers to an enterprise obtaining one or more other enterprises by issuing shares, paying cash or issuing bonds. After the completion of absorption and merger, only the merging party still maintains its original legal status, and the merged enterprise loses its original Legal personality It is engaged in production and business activities as part of the merged enterprise.

2. Establishment and merger. The establishment of a merger means that two or more enterprises form a new enterprise and exchange the shares of the new enterprise for the shares of the original companies. After the establishment and merger, the original enterprises lose their legal personality, and the newly established enterprises are engaged in production and business activities in a unified manner.

three Holding merger 。 Holding merger, also known as acquisition of controlling shares, refers to that one enterprise acquires all or part of the shares of another enterprise by paying cash, issuing shares or bonds right to vote Shares. After obtaining the controlling equity, the original enterprises are still engaged in production and business activities as independent legal entities.

two Enterprise M&A Economic substance classification

According to the nature of business merger, business merger can be divided into purchase merger and Equity syndication Consolidation of nature.

1. Purchase. Purchase means by transfer assets , assume liabilities or issue shares, etc., and one enterprise (the purchasing enterprise) obtains the net assets and operation control of another enterprise (the purchased enterprise). In business combination activities, there is usually one enterprise participating in the combination that can control other enterprises participating in the combination. As long as one enterprise participating in the merger can control other enterprises participating in the merger, it can identify which enterprise is the buyer.

2. Equity joint venture. Equity combination refers to the joint control of all or virtually all of the shareholders of the combined enterprise Net assets And operation so as to share benefits and risks with the consolidated entity. When the enterprises participating in the merger jointly control all or actually all of their net assets and operations according to the equality agreement signed, the managers of the enterprises participating in the merger jointly manage the merged enterprise, and the shareholders of the merged enterprise jointly share the risks and interests of the merged entity, this kind of business merger belongs to the business merger of equity joint nature.

Basis of accounting method selection

The choice of accounting method is based on economic substance rather than legal form. It is the right choice to clarify the classification of M&A according to legal form and economic essence Accounting treatment method The key to. The two classifications cannot be simply linked literally: Absorption and merger If it is a purchase, the acquirer belongs to the acquirer, and the acquiree belongs to the acquiree; A merger is a merger in the form of joint stock ownership, because they are jointly establishing a new enterprise. In fact, there is no necessary internal connection between the two classifications. From a legal perspective, one party is disqualified from legal status and merged into the other party, thus becoming a subordinate unit of the other party, while the other party continues to engage in production as the original legal entity and status economic activity 。 However, in essence, the shareholders of both parties may be on an equal footing through equity union Board of Directors The composition of and the arrangement of senior executives jointly control the post merger enterprise. For example, in 1998 Zhejiang University With Hangzhou University zhejiang agricultural university 、 Zhejiang Medical Sciences University The new Zhejiang University is not Zhejiang University Absorption and merger The last three schools, however, followed the name of Zhejiang University to integrate the resources of the original four universities. From the perspective of legal form, the establishment of merger means that two or more enterprises jointly establish a new enterprise and exchange the shares of the new enterprise for the shares of the original companies, but this does not mean that there is no main acquirer in the establishment of merger. If there is a main acquirer, it is a merger in the form of purchase in essence.

For the merger of purchase nature, the purchase method must be adopted for accounting; For the combination of equity joint nature, the equity joint method should be used in theory.

Purchase method and equity combination method: different results

Operation mechanism of purchase method

The purchase method assumes that a business combination is a transaction in which an enterprise obtains the net assets of other participating enterprises, which is basically the same as the transaction in which an enterprise purchases ordinary assets. The purchase law requires fair value Reflect the purchased enterprise's Balance Sheet Project, and reflect the fair value in the account In the consolidated balance sheet, the difference between the fair value of the net assets obtained and the purchase cost is reflected in the goodwill 。 Therefore, the key issues of the purchase method are the determination of the purchase cost, the determination of the fair value of the identifiable net assets of the purchased enterprise and the treatment of goodwill.

Operation mechanism of equity combination method

1. It is unnecessary to determine the fair value of the combined enterprise when the equity combination method is adopted. Regardless of whether the market price of new shares issued by the combining party is lower or higher than the book value of the combined party's net assets, the book value of the combined enterprise shall be recorded.

2. Under the equity combination method, the profit of the merged enterprise before the merger date is incorporated into the consolidated enterprise's statement as part of the profit of the merging party, and does not constitute the investment cost of the merging party.

3. Amount of capital stock surrendered on the book plus cash or other assets The shareholders' equity shall be adjusted for the difference between the amount of additional offer in form and the amount of capital stock converted in book. The reason is that when business combination is carried out in the form of equity combination, it is only the exchange of equity, not reality assets In exchange, the appreciation should not be regarded as goodwill, but as Owner's equity The increase of, that is, the measurement of assets is based on Original cost Expressive Fair market value The part exceeding the original cost should be reflected in shareholders' equity.

4. Fees for the merger process, such as registration fees Financial consultant fee Shall be regarded as the expenses of the merged enterprise and offset against the net income after the merger.

5. After the implementation of M&A, all parties involved in the M&A adopt unified accounting policies.

6. Deal with the problems of enterprises before M&A within two years after the completion of M&A assets The significant profits and losses incurred shall be Consolidated financial statements It shall be fully disclosed as an extraordinary matter.

General procedures

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Generally, enterprises' M&A activities go through the following four stages:

1. Preliminary preparation stage. According to the requirements of its own development strategy, the enterprise formulates M&A strategies, initially outlines the outline of the target enterprise to be merged, and formulates the expected standards for the target enterprise, such as the industry, size, market share, etc. Based on this, search and capture M&A targets in the property rights trading market, or release M&A intentions through the property rights trading market, collect enterprise sellers, conduct preliminary comparison on each target enterprise, screen out one or a few candidate targets, and further discuss the assets , finance, tax, technology, management and personnel.

2. M&A strategy design stage. Based on the first-hand information obtained from the previous phase of the survey, we designed the M&A model for the target enterprise and the corresponding financing, payment, fiscal, legal and other affairs arrangements.

3. Negotiation and signing stage. Make M&A based on the determined M&A plan Letter of Intent , as the basis for the negotiation between the two parties, and carry out negotiation and negotiation on the core contents such as M&A price and method, and finally sign the M&A contract.

4. Closing and integration stage. After signing the contract, both parties shall carry out property rights delivery , and integrate the enterprise in business, personnel, technology and other aspects. When integrating, the organizational culture and adaptability of the original target enterprise should be fully considered. Integration is the last link of the whole M&A process, and also the key link to determine whether the M&A can succeed.

The above is the process that all enterprises must go through in M&A. At present, M&A of enterprises in China is divided into M&A of listed companies and M&A of unlisted companies, that is, general enterprises Acquisition of listed companies And sale assets Received《 Securities Law 》、《 Administrative Measures for Acquisition of Listed Companies 》The merger and acquisition procedures are also more complicated due to stricter legal restrictions. This section mainly discusses the merger and acquisition procedures of general enterprises through the property rights trading market.

General enterprises

This refers to all enterprises except listed companies. The procedures for its M&A are as follows:

1. Enterprise policy decision The institution makes a resolution on merger and acquisition. According to the Enterprise development strategy And reach consensus and make resolutions on the merger and acquisition of enterprises. And authorize relevant departments to look for M&A targets.

2. Determine the acquisition target. The first step of successful M&A is to choose the right M&A target, which has a significant impact on the future development of enterprises. Generally, there are two ways to choose. One is through the property rights trading market, whose information comes from all parts of the country, with a wide range of information, standardized information and data, and a wide range of choices. The other is that the merger and acquisition parties directly negotiate to reach the intention of merger and acquisition, formulate the merger and acquisition plan and apply to the relevant departments.

3、 responsible investigation And put forward the specific plan of M&A. All materials provided by the M&A enterprise to the target enterprise, such as the corporate certification of the target enterprise assets And the detailed list of debts, the composition of employees, etc., to conduct a detailed investigation, review one by one, and carry out feasibility demonstration, on this basis, propose a specific merger and acquisition plan.

4. Report Management of state-owned assets Department approval. The merger of a state-owned enterprise shall be reviewed and approved by the state-owned asset management department with jurisdiction.

5. Proceed Asset evaluation 。 Accurate evaluation of enterprise assets is the key to the success of enterprise mergers and acquisitions. M&A enterprises apply for qualified majors recognized by the state Asset appraisal agency Evaluate the existing assets of the acquired enterprise, clear up the creditor's rights and debts, and determine the base price for the transfer of assets or property rights.

6. Determine the transaction price. with Evaluation price Based on the property rights transaction market Public listing , determine the market price by agreement, auction or bidding.

7. Sign the merger agreement. After the merger price is determined, the two parties to the merger reach an agreement on the main matters of the merger, and the owners of both parties to the merger formally sign the merger agreement.

8. Handling Transfer of property rights Liquidation and legal procedures. In this process, both parties of the merger and acquisition shall handle the transaction in accordance with the provisions of the merger and acquisition agreement assets Transfer, check and verify creditor's rights, and handle property rights at the same time Change registration Industrial and commercial change registration and land use right And other transfer procedures.

9. Announce mergers and acquisitions. After the completion of the merger and acquisition, both parties of the merger and acquisition will issue a merger and acquisition announcement through the relevant media.

M&A integration

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In the post financial crisis era, the market slowly recovered. In October 2010, the Wall Street Journal reported that, according to the statistics of Dealogic, the global M&A activity experienced a downturn in the second quarter and then rebounded significantly in the third quarter. In the third quarter, the total volume of global M&A transactions increased by 43% compared with the same period last year to US $730.3 billion. The transactions were mainly concentrated in the financial, oil and gas and telecommunications industries, as well as the Indian subcontinent and Latin America. Emerging markets, which played a major role in M&A activities in the first and second quarters, remained a key growth engine in the third quarter. M&A activities of Chinese enterprises are also increasingly frequent, and since September 2010《 Opinions of the State Council on Promoting Merger and Reorganization of Enterprises 》Since its introduction, listed merger and reorganization projects in various regions have grown rapidly. However, M&A is a double-edged sword, and how to use it becomes policy decision The focus of attention.

Is M&A helping entrepreneurs overcome difficulties, expand scale, enter new industries and enhance competitive advantage? Or are there many loopholes, hurting others and hurting yourself? Master systematic and comprehensive M&A related knowledge from multiple perspectives such as designing M&A plans, reasonable pricing of target companies, M&A risks, and laws and regulations in M&A, make objective and detailed analysis and evaluation when conducting M&A, and take scientific methods to do a good job in enterprise M&A integration planning, so that M&A, a powerful tool for enterprise development, can really be used for itself!

Valuation method for enterprise merger and reorganization

Value basis and evaluation approach Pricing mechanism of physical assets and financial assets

Different forms of value concepts

book value

market value

intrinsic value

Liquidation value

M&A value base

Assessment Approach

General valuation method

Net assets Law—— Assignment of Agreement

Case: absolute proportion

Replacement cost method—— Divestiture And acquisitions

Case: Xinxing Cast Pipe acquired Wuhu Iron and Steel Plant

Market pricing method - secondary market

Case: Baoyan disturbance, Baosteel Group's acquisition of Handan Iron&Steel

Earnings Multiple ——Overall listing

Case: Overall listing of Ansteel

Group Discussion: China Shipbuilding Group's overall listing by borrowing Hudong Heavy Machinery

competitive power

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Research on competitiveness

summary

Enterprise merger and acquisition refers to enterprise merger and acquisition, which is an economic act in which an enterprise acquires part or all of the assets or equity of other enterprises in cash, securities or other forms to gain control over the enterprise.

research contents

As a way of enterprise development strategy, M&A is very important to make correct strategic decisions and make scientific strategic plans. After the senior executives make decisions and plans, they begin to search for target companies and seek M&A opportunities. After finding a suitable target company, they must also investigate and analyze it. Only after this evaluation can they finally decide on the M&A target. "Know yourself and the enemy, and you will never be defeated". It is not enough to understand the situation of the enterprise itself, but also need to clearly understand the real situation of the target company. Only in this way can we choose the target enterprises that meet our own development strategy, formulate effective target plans, and lay the foundation for successful M&A.

To select a target company, the first step is to analyze and evaluate the business environment and current situation of the enterprise, including the financial situation, business management, personnel organization and market share of the enterprise, so as to provide data and lay a foundation for predicting the future business situation of the enterprise and evaluating the value of the enterprise. After understanding the business status of the enterprise and evaluating its own value, it is necessary to judge the future development direction of the enterprise in order to correctly select the target objects for mergers and acquisitions.

Basic framework

Chapter I: Status Quo and Prospects of Global Industry Development

It includes industry overview, PEST environment analysis, all links of the industrial chain, market capacity, supply and demand status, market competition pattern, development trend, development overview of major countries, etc.

Chapter II: Business Performance and Competitiveness of Global Leading Manufacturers

Chapter 3: Current situation and prospect of China's industrial development

It includes industry overview, PEST analysis, all links of the industrial chain, market capacity, supply and demand status, market competition pattern, development trend, etc.

Chapter 4: Business Performance of China's Leading Manufacturers

Including product category, output, capacity, sales volume, sales revenue, assets, liabilities, sales cost, sales expense, financial expense, management expense Asset turnover , gross profit rate, human resources, technology research and development, etc.

Chapter V: Overview of M&A in the industry globally and in China

Including the overall situation, relevant policies and development prospects.

Chapter 6: Analysis of M&A cases in this industry globally and in China

Including successful experience and failure lessons.

Chapter 7: Development Status of Acquisition Initiating Enterprises and Acquisition Target Enterprises

Including product category, output, capacity, sales volume, sales revenue, sales channels, gross margin market position, market penetration, human resources, technology research and development, etc.

Chapter 8: Target Enterprise Value Identification

Including influencing factors, cost method, market method, real option method, etc.

Chapter 9: Feasibility Analysis of M&A

Including relevant policies, M&A value, M&A feasibility, problems and risks.

Chapter 10: Views and Suggestions

Merger and acquisition of German enterprises

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German regulations on foreign investment

Different from China's foreign investment approval system, Germany basically equates foreign investors with domestic investors, with few restrictions except for several special industries.

1. Foreign Investment Law

Goods, services, capital, payments and other economic exchanges with foreign countries are free in principle (Article 1, paragraph 1, sentence 1 of the Foreign Economic Law). Foreign enterprises can acquire German enterprises without any license. However, there are different exceptions in specific industries, such as finance and arms.

2. Banking Financial services Insurance

Germany has a very strict supervision system for the financial industry. Both banking and financial services enterprises and insurance companies need to obtain permission from the Federal Financial Services Supervision Agency（ credit Article 32 of the Industrial Law and Article 5 of the Insurance Supervision Law).

3. If a bank or financial service enterprise (or its important equity 1) is acquired, it must notify the Federal Financial Services Supervision Agency (Article 2b, Paragraph 1 of the Credit Industry Law). If, after the acquisition, the Federal Financial Services Supervision Administration is unable to supervise the foreign parent company of the target company or the supervisory authority of the country where the parent company is located is unwilling to cooperate satisfactorily with the Federal Supervision Administration, the Federal Financial Services Supervision Administration may refuse to grant approval in accordance with Item 3, Paragraph 1a, Article 2b of the Credit Industry Law. In principle, this also applies to the acquisition of equity in insurance companies (Article 8, paragraph 1, sentence 3, item 3 and the following clauses of the Insurance Industry Supervision Law).

4. Monitoring of war weapons

The arms industry is also under strict control. The production, purchase, sale, import and export, and transportation of war weapons need to be licensed (Articles 2 to 4a of the War Weapons Control Law). If the applicant is not a German living in Germany, the application is likely to be rejected (Article 6, Paragraph 2, Item 2, Item a of the War Weapons Control Law). In principle, the status of the shareholders of the company is not considered in the review procedure, but the status of the natural person with specific behavior. However, the nationality of the shareholders may also be considered. Therefore, the approval for foreigners to purchase military enterprises can be revoked (Article 7, paragraph 1, of the War Weapons Control Law).

5. Other Licenses

5-1. Several other industries may also require official permission. But generally, the license is issued to the individual operator, so Equity acquisition There won't be much problem. However, if Asset acquisition , it is necessary to consider whether the acquirer will get the necessary permission. In this case, the nationality of the operator or its shareholders is not generally considered. Here are some examples of licenses for individual operators:

Energy supply enterprises need to be licensed (the first sentence of Article 3 of the Energy Economic Law). If the applicant does not have the personnel ability, technical ability and economic ability to provide energy for a long time and normally or if the approval of its provision of energy will bring adverse consequences to energy users, it may be rejected (Paragraph 2, Article 3 of the Energy Economy Law).

5-2. Enterprises in the telecommunications industry need a license (Paragraph 1, Article 6 of the Telecommunications Law). The license can only be issued when there are enough wave frequencies, the applicant can be trusted, efficient and has professional knowledge, and the issuance of the license will not endanger public safety and order (Paragraph 3, Article 8 of the Telecommunication Law). When the owner changes, it shall notify the official (Paragraph 2, Article 9 of the Telecommunication Law).

5-3. Mineral development requires multiple licenses (Article 6 of the Mining Law). Such permission depends on different technical, professional and content factors, as well as the credibility of the applicant and the public interest (Articles 11 to 13 of the Mine Law).

5-4. The permission of the intermediary, construction developer and construction supervisor can only be issued when the applicant can rely on and has the specified property conditions (Article 34c of the Industrial and Commercial Regulations).

5-5. There are also many licensing restrictions in the transportation industry. The license can only be issued if the applicant can be trusted, has the ability to pay and has relevant professional skills (paragraph 2 of Article 3 of the Goods Transport Law, paragraph 1 of Article 13 of the Personnel Transport Law, and paragraph 2 of Article 6 of the General Railway Law). In addition, there are other specific conditions. The nationality of the applicant's shareholders is not important, but in certain circumstances the applicant is required to have a residence in Germany.

To sum up, the nationality of the applicant's shareholders is not important, and only in rare cases will nationality play a key role in the review of credibility and public interest.

example

Ningbo Junsheng Investment Group acquires German Purui

Ningbo Yizhou Investment Group acquires German Weiyungao Co., Ltd

Chongqing Light Textile Holding (Group) Co., Ltd. acquires Germany Saargummi Group

Hangzhou Machine Tool Group Acquisition of Steiger flat knitting machine in Germany

Taizhou Jack Holding Group acquires German Benma and Tuoka enterprises

Ningbo Zhongqiang Company acquired the brand and some equipment of LUTZ

Dalian Machine Tool Group acquires 70% holding of Zmmerman Co., Ltd

Shanggong Shenbei acquires 94.98% stake of German DA Company

Shenyang Machine Tool Group acquired all the net assets of German Heath

Harbin Measuring Tools&Cutting Tools Group acquires equipment, technology and sales network of Kaishi Company

Shandong Yankuang Group acquires the technology of Kaizestuer coke plant in Germany

Shagang Group acquired a complete set of equipment from Germany's Dortmund Steel Plant and disassembled it back to China

Weichai Power acquired Kaiao

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