What are Mergers and Acquisitions?

Mergers and acquisitions (M & A) include two meanings and two ways of mergers and acquisitions. It is customary in the world to use mergers and acquisitions together, collectively referred to as M & A, and in China as mergers and acquisitions. That is to say, mergers and acquisitions between enterprises are the behaviors of corporate legal persons to acquire the property rights of other legal persons in a certain economical manner on the basis of equality, voluntariness, and equivalent compensation. Corporate mergers and acquisitions mainly include three forms of corporate mergers, asset acquisitions and equity acquisitions.

Mergers and acquisitions

due to

method

Method of company merger and acquisition:

(1) Purchase of assets of other companies with cash or securities during company merger and acquisition;

(2) company mergers and acquisitions to purchase shares or stocks of other companies;

(3) Issuing new shares to shareholders of other companies in mergers and acquisitions in exchange for their equity, thereby obtaining assets and liabilities of other companies. "

condition

Corporate mergers and acquisitions include the following main conditions:

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

(2) The company purchases or subscribes for shares and equity to increase the price;

(3) the duration of the performance model agreement;

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

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

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

Corporate mergers and acquisitions can be divided into many categories, such as: SP company mergers and acquisitions, Internet company mergers and acquisitions, ICP company mergers and acquisitions, online game company mergers and acquisitions, telecommunications and SMS company mergers and acquisitions, mobile SMS company mergers and acquisitions, China Unicom SMS company mergers and acquisitions, WAP company mergers and acquisitions, technology company mergers and acquisitions, etc. .

SP company

SP company mergers and acquisitions are divided into SP company sales and SP company acquisitions. Generally, SP company sales are

Company M & A License

A securities company engaging in financial advisory business for mergers and acquisitions of listed companies shall meet the following requirements:

(1) The company's net capital complies with the regulations of the China Securities Regulatory Commission;

(2) It has a sound and well-functioning internal control mechanism and management system, and strictly implements risk control and internal isolation systems;

(3) Establishing a sound due diligence system with good project risk assessment and core mechanisms;

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

(5) The company's controlling shareholders and actual controllers are in good standing and have no record of major violations of laws and regulations;

(6) No less than 5 financial advisers;

(7) Other conditions stipulated by the China Securities Regulatory Commission. ^[1]

The essence of mergers and acquisitions is a kind of transfer of rights in the course of the movement of corporate control. M & A activities are carried out under certain conditions of property rights system and enterprise system. In the process of M & A, one or some part of the rights subject obtains corresponding benefits by transferring the control of the enterprise to the other part, and another part of the rights subject This part of control is obtained by paying a certain price. The process of corporate mergers and acquisitions is essentially a process in which the subject of corporate rights is constantly changing.

form

From the perspective of industry, a company's M & A can be divided into the following three categories:

As a capital organization, an enterprise must seek maximum capital appreciation. Corporate mergers and acquisitions are an important

When making an acquisition, an enterprise should make a decision based on or cost-benefit analysis. The basic principle is that the net income of mergers and acquisitions should generally be greater than zero, so that mergers and acquisitions can be profitable in order to achieve the goal of maximizing shareholder wealth. The calculation of M & A net income can usually be performed in the following ways: First, calculate the M & A income, and the M & A income should be the balance of the overall value of the new company after the acquisition minus the overall value of the acquirer and the acquiree (target company) before the acquisition. which is

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

For example: Company A merged with Company B, the value of Company A before the merger was 300 million yuan, and the value of company B was 100 million yuan. Company A merges with company B to form company AB. The value of company AB is 600 million yuan, and the merger and 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, subtract the M & A premium paid for the acquisition of the acquired company (that is, the difference between the M & A price and the value of the acquiree before the acquisition) and the lawyers, consultants, and negotiation for the acquisition activities. The balance after M & A expenses is the net income of M & A. The calculation formula is as follows:

Net M & A income = M & A income-M & A premium-M & A costs

There are many reasons for corporate mergers and acquisitions, which can be to pursue

The choice of accounting methods for corporate mergers and acquisitions has always been one of the most controversial issues in the accounting field. January 30, 2004 Major Chinese Consumer Electronics and Mobile Phone Manufacturers

In general, a company's M & A behavior goes from only a vague M & A intention to the successful completion of an M & A process through the following four stages:

1. The preliminary preparation stage. Based on the requirements of its own development strategy, the company formulates merger and acquisition strategies, initially outlines the outline of the target enterprise to be acquired, and formulates the expected standards for the target enterprise, such as the industry, size, and market share. Based on this, search and capture the target of mergers and acquisitions in the property right exchange market, or issue merger and acquisition intentions through the property right exchange market, solicit corporate sellers, and then make a preliminary comparison of each target company to screen out one or a few candidate targets, and further

In the post-financial crisis era, the market is slowly picking up. According to the Wall Street Journal in October 2010, according to Dealogic statistics, global M & A activity rebounded significantly in the third quarter after experiencing a downturn in the second quarter. The total value of global M & A transactions in the third quarter increased by 43% year-on-year to US $ 730.3 billion. 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 dominated M & A activity in the first and second quarters, remained key growth engines in the third quarter. Chinese corporate mergers and acquisitions are also becoming more frequent, and since the State Council's Opinions on Promoting Mergers and Reorganizations of the State Council in September 2010, the number of listed mergers and acquisitions and restructuring projects has grown rapidly. However, corporate mergers and acquisitions are a double-edged sword. How to use this sword to become a merger

Competitiveness research

Overview

Corporate mergers and acquisitions refer to corporate mergers and acquisitions, and are an economic act in which a company purchases, in cash, securities, or other forms, some or all of the assets or equity of another enterprise to gain control of the enterprise.

research content

As a way of corporate development strategy, corporate mergers and acquisitions, it is extremely important to make correct strategic decisions and formulate scientific strategic plans. After the senior management of the company has made a decision and made a plan, it starts to search for target companies and seek merger and acquisition opportunities. After finding a suitable target company, it must also investigate and analyze it. After evaluating this, it can finally determine the target of mergers and acquisitions. "Know yourselves and know yourselves, you won't endure a hundred battles." It is not enough to understand the situation of the company itself. You also need to clearly understand the real situation of the target company. Only in this way can we select target companies that are in line with our development strategy, formulate effective target plans, and lay the foundation for successful mergers and acquisitions.

Selecting a target company must first analyze and evaluate the company's operating environment and operating status, including the company's financial status, management, personnel organization, market share, etc., to provide data for predicting the future operating status of the company and assessing the value of the company To lay the foundation. After understanding the current status of the business and assessing the company's own value, it is necessary to judge the future development direction of the business in order to correctly select the target audience for the required mergers and acquisitions.

Basic framework

Chapter 1: Status and Prospects of Global Industry Development

Including industry overview, PEST environmental analysis, various links in the industrial chain, market capacity, supply and demand status, market competition pattern, development trends, major country development profiles, etc.

Chapter 2: Operating Performance and Competitiveness of Global Leading Manufacturers

Chapter 3: Status and Prospects of China's Industrial Development

Including industry overview, PEST analysis, various links of the industrial chain, market capacity, supply and demand status, market competition pattern, development trends, etc.

Chapter 4: Operating Performance of China's Leading Manufacturers

Including product category, output, production capacity, sales volume, sales revenue, assets, liabilities, cost of sales, sales expenses, financial expenses, management expenses, asset turnover, gross profit margin, human resources, technology research and development, etc.

Chapter 5: Global and China M & A Overview

Including the overall situation, related policies, development prospects.

Chapter 6: Global and China M & A Case Study

Including successes and failures.

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

Including product categories, output, production 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 faced.

Chapter 10: Perspectives and Suggestions

German foreign investment regulations

Unlike China's foreign investment approval system, Germany treats foreign investors basically as domestic investors, with few restrictions except for a few special industries.

1. Foreign Investment Law

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

2. Banking, financial services, and insurance

Germany has a very strict supervision system for the financial industry. Banking financial services companies and insurance companies need to obtain permission from the Federal Financial Services Supervision Agency (section 32 of the Credit Act and section 5 of the Insurance Supervision Act).

3. If you acquire a bank or financial services enterprise (or its significant equity1), you must notify the Federal Financial Services Supervision Agency (Credit Industry Law, Article 2b, paragraph 1). If after the acquisition, the Federal Financial Supervisory Service 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 Office, the Federal Financial Service Supervisory Office Article 2b, paragraph 1a, paragraph 3 of the Act refused to grant approval. This also applies in principle to the acquisition of equity in insurance companies (Article 8, paragraph 1, paragraph 3, paragraph 3, and the following clauses of the Insurance Supervision Law).

4. Surveillance of war weapons

The arms industry is also subject to very strict surveillance. The production, purchase, sale, import and export, and transportation of war weapons require a permit (Articles 2 to 4a of the War Weapons Control Act). If the applicant is not a German who lives in Germany, the application is very likely to be rejected (Article 6, paragraph 2 (2) (a) of the War Weapons Control Act). In principle, the status of shareholders of a company is not considered in the review process, but the status of a natural person for specific acts, but the nationality of shareholders may also be a factor to consider. As a result, approval for foreigners to acquire military industrial enterprises can be revoked (Article 7, paragraph 1 of the War Weapons Control Act).

5. Other licenses

5-1. Several other industries may also require official licenses. However, in general, the license is issued to the individual operator, so there will not be a big problem in the acquisition of equity. However, in the case of an asset purchase, it is necessary to consider whether the acquirer will obtain the necessary permission. Here, the nationality of the operator or its shareholders is generally not a factor to be considered. Here are some examples of individual licenses:

Energy supply companies need a permit (Article 3, first sentence of the Energy Economics Law). Applicants may be denied approval if they do not have the human, technical, and economic capabilities to provide energy in a long-term, normal manner or to approve the provision of energy will have adverse consequences for energy users (Article 3, paragraph 2 of the Energy Economics Law) .

5-2. Telecommunications companies need a license (Article 6, paragraph 1 of the Telecommunications Law). Licensing is possible only when there is sufficient frequency, the applicant can be trusted, efficient and has the expertise and the issuance of the license will not endanger public safety and order (Article 8 (3) of the Telecommunications Law). Any change shall be notified to the official (Article 9, paragraph 2 of the Telecommunications Law).

5-3. Multiple licenses are required for mineral development (Article 6 of the Mine Law). Such licenses depend on different technical, professional and content factors, as well as the trustworthiness and public interest of the applicant (Articles 11 to 13 of the Mine Law).

5-4. The licenses of the intermediary, construction developer and construction supervisor can only be issued if the applicant can be trusted and has the prescribed property conditions (Article 34c of the Industrial and Commercial Regulations).

5-5. There are often many license restrictions in the transportation industry. Licensing can only be granted if the applicant can be trusted, has the ability to pay and has the relevant professional skills (Article 3, paragraph 2 of the Cargo Transport Law, Article 13, paragraph 1, of the Personnel Transport Law, Article 6, paragraph 2 of the General Railways Law ). 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 shareholders of the applicant is not important, and only in rare cases can nationality issues play a key role in the review of trustworthiness and public interest.

example

Ningbo Joyson Investment Group acquires Preh

Ningbo Yizhou Investment Group acquires Weiyun Gao AG

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

Hangzhou Machine Tool Group acquires Steiger flat knitting machine from Germany

Taizhou Jack Holding Group acquires German Benma and Toka companies

Ningbo Zhongqiang Company acquired the German LUTZ brand and some equipment

Dalian Machine Tool Group acquires 70% of German Zimmermann Co., Ltd.

Shangong Shenbei acquires 94.98% of German DA company

Shenyang Machine Tool Group Acquires All Net Assets of Heath

Harbin Measuring & Cutting Tools Group Acquires Equipment, Technology and Sales Network

Shandong Yankuang Group Acquires Technology from Kaiserstuhl Coke Plant in Germany