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Split share structure reform of listed companies in China M & A

Author: ZhangNa From: www.yourpaper.net Posted: 2009-05-24 04:53:38 Read:
[Abstract] With the arrival of the era of "tradable" the institutional barriers sweep will lead to a new round of new listed company M & A boom. Coupled with the implementation of new corporate and securities law, will improve the listed company M & A financing. In this paper, the current economic situation to discuss the split share structure reform of the mergers and acquisitions of listed companies in China brought new influences.
[Key words] split share mergers and acquisitions affect

With the depth of the split share structure reform, the true meaning of the tradable shares of listed companies in China's A-share market will achieve. Large-scale mergers and acquisitions by relying on capital market liquidity is expected to be resolved, the driving force of the mergers and acquisitions, M & A mode of operation will be a fundamental change in the mergers and acquisitions of listed companies in China will gradually appear the characteristics of a mature market. The split share structure reform for enterprise mergers create more favorable conditions. Re-layout of the industry caused by mergers and acquisitions will drive the state-owned enterprises, foreign-funded enterprises, private enterprises to re-find their own strategic position. China's stock market fell sharply in 2008, but also for the implementation of mergers and acquisitions has created a good opportunity for full circulation. Share reform to eliminate not only the fundamental deficiencies in the system obstruct China's capital market's healthy development, and mergers and acquisitions of listed companies has brought a considerable positive impact, the company M & ushered in an entirely new market environment. New "Company Law", "Securities Act" and the acquisition of the listed companies management approach "promulgated and implemented, further clearing the affect the company's M & A legal obstacles to the smooth implementation of which will stimulate the enthusiasm of M & M & body, which greatly enhanced the M & A the vitality of the market.
Split share structure reform of the mergers and acquisitions of listed companies
"Tradable" share incentive scheme will really work
Active M & A activity in the market will inevitably produce a new competitive market - listed market for corporate control. This market allows administrators to feel stressed efforts to improve the governance structure of listed companies. 2008 due to the financial crisis, many enterprises find themselves in a sales slump and a shortage of funds dilemma for mergers and acquisitions has brought new opportunities. Once the merger or acquisition, the new controlling shareholder of the incompetent management replace, forcing managers have to proceed from the interests of the shareholders, to pursue the maximization of enterprise value as its mission.
Split share structure reform also created conditions for the company's incentive system innovation "tradable", on the one hand, enterprises can be open and fair control of the market, on the other hand, the price really become a measure of its revenue factors, equity incentive really work.
Equity reform, the new law changes reduced the equity and debt financing restrictions
Simultaneously with the shareholding reform is the implementation of the new "Company Law" and "Securities Act", the new method compared to relax the conditions of issue of the stock, such as the conditions of issue of new shares canceled in the previous issue of shares has been fully subscribed , and at least one year and in the last three years continuously profitable and paying dividends to shareholders restrictions; purposes shall be subject to approval of the new law and the old law than bond issuance conditions not specified, the limit to make up for the loss and non-production expenditure bond interest rates determined by; Securities Act interest rates on the main issue of the right to determine the way. This shows that in the new under the Securities Act, listed companies can more easily the financial equity capital, due to the relaxation of the restriction of the use of bond financing and bond interest rate provisions, is conducive to corporate mergers and acquisitions issue of high interest rates of high-risk bonds for financing. Therefore, the use of the market for mergers and acquisitions financing after the share reform will become easier.
(3) the acquisition of M & body changes, the tender offer
listed companies in mergers and acquisitions mainstream
A long time, due to the split share structure that exists in reality, the mergers and acquisitions of listed companies is basically an agreement to acquire Mode "dominate the world". After the split share structure reform, the transfer by agreement, the tender offer and the secondary market bid, will become the acquisition of M & A main.
After the completion of the split share structure reform, on the one hand, to eliminate the option agreement to acquire the raison d'¨ētre, in the context of all your shares in circulation, all the shares can be sold through the market; On the other hand, to create the conditions for the tender offer, the share reform, not only dispersed ownership, all of the circulation, but also achieved the same stock, the same rights, the same price, reflecting the true equality of all shareholders' rights, a system which guarantees the acquisition of the interests of the parties to the transaction to achieve fair, consensual sexual activity before the tender offer occur. Therefore, in the acquisition of the share reform of listed companies, the tender offer will gradually be promoted to become the mainstream of the listed companies in mergers and acquisitions. 4 split share structure reform of stock payment gradually increasing
Gradually reduce the proportion of the mergers and acquisitions of listed companies in the way of cash payment and the amount of M & A market in the initial sign of maturity. Stock has become a major payment methods, mergers and acquisitions and international large-scale M & A cases take more convertible way. And are therefore difficult to convertible mergers and acquisitions in China due to the split share structure, the lack of market price required for the convertible. After the split share structure reform, equity will be more dispersed, the acquisition becomes easy, relatively lower amount of acquisition; same time, due to the same stock with the price, but also to facilitate the implementation of equity exchange. In recent years, China's securities market both in theory and in practice are the equity to pay this way to create the conditions. TCL Group merged with TCL Communication as well as the first department store merger Hualian Department adopted a share-based payment. China's "acquisition of listed companies management approach" Article 6 is also clear that the acquisition of listed companies can be used other than by way of cash. With the gradual expansion of the scale of mergers and acquisitions and mergers and acquisitions broaden financing channels, the stock will have a leading role in a major M & Payment.
Strategic acquisitions will gradually replace the financial
mergers and acquisitions to become a listed company M & A in the mainstream
Different weights of the same stock in the past mergers and acquisitions for the short-term economic interests, not entirely depend on the normal combination of needs of the corporate assets. With the split share structure reform, based on the company's long-term strategy, technology, management and marketing resources through mergers and acquisitions to maximize synergies and enterprises, while upgrading the technical level, but also to meet the corporate strategy adjustment and the needs of the industrial transfer. Select acquisition targets strategic objectives, principles have a synergistic effect, achieve value growth of enterprises of both sides to ensure that future competitive advantage.
2009 is the year of the split share structure reform of listed companies into tradable peak through the secondary market holdings, repurchase, creating a wealth of opportunities for the acquisition of the asset restructuring. The downturn in the economy, low interest rates and low pricing environment will give rise to a wave of restructuring. With the increase in the number of full circulation of listed companies, the industrial capital to participate in the secondary market pricing power has continued to improve. China's securities market will be a wonderful landscape.
[1], deputy director of the Finance and Securities Research Institute of Renmin University of China Zhao Xijun
judgment of the share reform anniversary
[2] favorable policies intensive introduction of mergers and acquisitions or to fund investment focus, the 21st Century Business Herald 2009.1.17
[3] Ba: circulation times: China is opening the door to strategic acquisitions of modern commercial bank 2006.11
[4] Zheng Xiangyong Li Fenglin: the split share structure reform of the financing of mergers and acquisitions in China. Theoretical Study 2007.2
[5] share reform of the M & A mode richer, the China Securities Journal, 2005.12.20
[6] Rowan Chi Dong Ice: listed company M & A Legal Practice Law Press, 2005 edition
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