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Research on the financial problems of mergers and acquisitions in China

Author: ZhengLiBin From: www.yourpaper.net Posted: 2010-06-06 16:54:06 Read:

Abstract: in recent years, some foreign Multi-National Corporation to enter the domestic market through mergers and acquisitions, domestic M & a market has become increasingly active, the enterprises of our country will face the fierce competition of M & A.But at present our country enterprise M & A in theoretical research, strategy and method of operation procedures compared with foreign countries there is a big gap and the financial problem is the core and focus problems in enterprise merger and acquisition.Therefore, study on financial problem of mergers and acquisitions in China, is of great theoretical and practical significance to continue to guide our behavior of enterprise merger and acquisition healthy development.The paper analyzes the value assessment, mergers and acquisitions in the payment and financing and other important financial problems, and puts forward the solution to the problem.
Keywords: the enterprise merger enterprise value assessment method of payment and financing

The basic theory of
, M & A
The concept of 1 M & A.M & A, also known as the "merger", is the merger and acquisition (Merger) and acquisition (Acquisition) collectively, commonly referred to as "M& A", property transactions in the market mechanism and enterprise in order to gain control over other enterprises.In the M & a party for the M & A enterprise, is the enterprise is the goal of enterprise M & A.The implication of M & A is the most narrow, narrow and broad sense.The most special of M & A, which is defined by the company law of China's absorption of the merger or consolidation.Let A, B in two, A B=A merger; A B=C consolidation; in the narrow sense refers to an enterprise M & A, with the merger of other enterprises to expand market share or into other sectors, or the enterprise asset stripping, division sold to obtain interest behavior; generalized merger, in addition to outside the narrow enterprise merger, transfer of any enterprise management right (whether formal or substantive transfer) are included.
2 necessary conditions for acquisitions.(1) subject and object conditions of enterprise merger and acquisition.Refers to the subject has an independent legal personality, directly engaged in the production and circulation enterprises and participate in the organization as well as some have the legal person status combined with production and research organization of moderate scale of production and operation.The object is refers to the enterprise asset acquisitions, rather than the enterprise itself.The merged enterprise assets can be in the form of assets, also can be the securities assets in the form of.The enterprise of subject and object is the most basic conditions exist to the M & A.(2) the complete market system.The market system is composed of the commodity market and factor of production market, the whole system of internal relations exist between various markets, because of mergers and acquisitions between enterprise capital transfer behavior, the actual completion of need from financial market, property rights trading market, information intermediary market support.Therefore, the establishment and perfection of the market system is the important condition of enterprise merger and acquisition can successfully.(3) the good market environment.Market order good mainly for self regulation is realized through the law of value, so that most of the market economic behavior in an orderly state rather than a state of chaos.The concrete content includes: out of order, price is determined by both sides of supply and demand, to break the monopoly.(4) the intermediary institutions necessary.The enterprise merger and acquisition is a complicated system engineering, involving a wide range, also need professional knowledge and technology related support.Often need to investment banks, finance companies, accounting firms, law firms, the asset appraisal institution to help coordinate the completion of the merger and acquisition work, together.
The basic process of 3 M & A.(1) the merger plan stage.Enterprises in the implementation of the merger and acquisition strategy, according to the macroeconomic environment, industry conditions, enterprise development stage, assets and liabilities, operating conditions and development strategy and other aspects of M & A needs analysis, to determine the target enterprise in M & M & a framework features, direction and way of purchasing funds, arrangement and the merged company to make future situation objective analysis and evaluation.(2) the negotiation phase.When M & A companies decided to implement mergers and acquisitions, mergers and acquisitions will enter the negotiation phase.The acquirer must with management, target enterprise's main shareholders, the competent authorities at all levels and relevant aspects of transaction condition, price, mode, procedure, such as communication and negotiation, and based on reached a preliminary consensus, signed the transfer of intentionality file.(3) and M & A due diligence investigation of the implementation phase.At the end of the commercial negotiations and pay a deposit, merging the enterprise shall hire an asset assessment institution, accounting firms and other intermediary agencies to assist comprehensive due diligence on the true extent of Target Corp, to review the preliminary information, looking for potential problems.Due diligence, including the financial review of enterprise production and management review and legal review.Merger and acquisition of enterprises according to the due diligence investigation results, to the target enterprise survey, including a re-evaluation of the M & a standard, to determine whether the merger.(4) the stage of merger integration.M & a need for further integration of the acquired enterprise governance structure, management, assets and liabilities, human resources, enterprise culture, all elements of enterprise, eventually formed a complete fusion between the two sides, and produce the expected benefits of the acquisition, this is truly realize the merger and acquisition target.
two, financial problems of mergers and acquisitions in China
1 the acquisition target enterprise value assessment.The target enterprises in the merger of enterprises value assessment is a very complex but vital steps, scientific, fair value assessment of the target enterprise, not only can save acquisition costs, promote the merger and the smooth progress of the negotiations, but also to obtain the key to success.One is to pay attention to assessment of the value of tangible assets, while ignoring the value of intangible assets; the two is the information asymmetry, data distortion, resulting in unnecessary loss of the M & A; three is the method of choice Limited merger assessment, scientific nature, rationality of result; four is the asset appraisal institutions failed to give full play to its functions.
Question 2 corporate payment.(1) single means of payment.At present our country most of the M & A is only limited to the "simple mode of payment in cash asset replacement".Cash payment manner requires the acquirer must be quite large number of identified to date in the currency of payment, is restricted by the acquirer immediate cash payment ability, but also increase the target enterprise tax burden.In the cross-border mergers and acquisitions, the cash payment means facing the convertibility of currency risk and exchange rate risk in purchase.Payment is backward and single, make large-scale mergers and acquisitions by the shortage of funds constraint.(2) some special payment risks.There are some special payment in our country at present, the free transfer target enterprise such as in direct government intervention will run into trouble to the acquirer, the acquirer is not paid in form, but in fact take a large number of resettlement and stripping cost.Another form of debt to stock and other special payment, the mode of the M & A costs are often not accurate calculation, but also not conducive to mergers and acquisitions and mergers and acquisitions after the cost of control, the post-merger integration difficult financial risks.(3) the unreasonable ownership structure, affect the choice of payment method.State-owned shares, poor circulation phenomenon of China's securities market, which is the root of the problem lead to government intervention, the difficulty of pricing, exchange ratio is difficult to determine the origin of the M & a market, single means of payment, unreasonable.Only by solving the problem of state-owned shares in circulation, can make the payment way open, fair, justice, also can have multiple choice.With the reform of the shareholder structure of the complete and carry out the size of the non-lifting of the ban, this problem is gradually improving.
The financing problem of 3 mergers and acquisitions.In the company merger, the financing problem is one of the key factors to the success of mergers and acquisitions.But looking from the development process of enterprise merger and acquisition in China, long-term since source purchase funds become the major bottleneck of large-scale strategic acquisitions.The main problems of China's enterprises in the acquisition of financing for: (1) the policy because of the limitation of the narrow channels of financing.The first is direct restrictions on financing.According to the "Provisional Regulations on management of stock trading in article forty-third," any financial institutions may not provide credit "for stock trading; according to the" 2O "management regulations" provisions of company bonds, corporate bonds financing distribution firm shall not be used for risk investment real estate sales, stock trading and futures trading has nothing to do with the production the operation of the company."The above provisions in China in order to risk speculation inhibition of enterprises in the two stage of the securities market and the introduction, although largely maintain the stability of the financial markets, but also restricted the normal merger behavior through the two secondary market.Secondly, on the financing limit is another important reason of enterprise financing channel is narrow.Before 1998, China's bank loans to implement scale management, special fund is special, not financing.Since January 1, 1998 to cancel the asset and liability management implementation of bank loans.Is a continuation of the longer the issue quantity control of corporate stocks and bonds, while the control ways are constantly changing, but essentially limit the enterprise in the capital market's financing ability.(2) the cost of financing and decision problems.
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