What is a Takeover Target?

Acquisition (Acquisition) refers to the economic behavior of a company to obtain a certain degree of control of other companies through property rights transactions to achieve a certain economic goal. Acquisition is a form of corporate capital management that has both economic and legal significance. The economic significance of the acquisition means that the operating control right of a company is changed, and the original investor has lost the operating control right of the enterprise, which is essentially to gain control. When the industry is depressed and the economy is sluggish, low-priced stock purchases can be made on the other company's secondary market. In a legal sense, China s Securities Law stipulates that acquisition refers to the act of holding a 30% of a listed company s outstanding shares to purchase the company s shares, and its essence is to purchase the equity of the acquired company.

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Citation explanation

Buying Treasury bills means buying in large quantities or from various sources. Luo Binji's "Journey" 2: "They do not actively buy, they deliberately reduced prices." Xu Chi "Phoenix in Fire" 3: "The imperialists are doing everything possible

In 2012, the scale of Chinese companies' acquisitions in the United States reached a record high of approximately $ 10.5 billion, but in fact, China is cautious about engaging in acquisitions in the United States, and its ambitions for mergers and acquisitions in the United States are not as large as people think.

The scale of Chinese companies acquisitions in the United States has reached an annual record of approximately $ 10.5 billion, which is equivalent to the total of the previous four years, and is higher than the total of Chinese companies transactions in Asia, Africa, the Middle East and Latin America. The scale of US Treasury bonds held by China in October decreased from the same period of the previous year, which also reflects a shift from the People's Bank of China to financing US deficits to purchase productive assets by Chinese companies.

In contrast, the scale of acquisitions by Chinese companies in China has fallen by about half, to about $ 5 billion, less than one-third of 2008 levels.

The Wall Street Journal Chinese network analysis said that a few large transactions distort the data. But it also shows some consistency.

First, typical transactions are small. The average size of about 43 Chinese acquisitions in the United States is $ 245 million each. Excluding a few significant outliers (transactions worth more than $ 2 billion), the average size is less than $ 100 million. This may reflect that smaller deals are more likely to escape the attention of regulators and politicians.

Second, China's appetite for US assets extends far beyond the oil and gas industry. A Deloitte survey found that Chinese buyers are mainly acquiring technology, brands and market share in the United States. Only 6% of respondents said that Chinese acquisitions in the United States focus on obtaining resources. For example, in recent weeks, Wanxiang United States spent $ 256.6 million on the acquisition of battery maker A123 systems, and American International Group (AIG) sold $ 8.23% of its aircraft leasing company International Leasing Finance Company to a company for $ 4.23 billion. China Consortium. In addition, Dalian Wanda's $ 2.6 billion acquisition of theater operator AMC Entertainment is also eye-catching.

In addition, although some oil and gas industry deals are rich, other Chinese buyers have not arbitrarily written large checks. Compared with other aircraft leasing asset transactions, IFC's valuation obtained in the above transaction can be much lower, and AIG had planned to list IFC, and the valuation is much more than that.

However, the most shocking statistics may also count on this: in terms of amount, the size of Chinese acquisitions in the United States accounts for only 1% of the total US M & A transactions. One reason may be that China is concerned that regulators such as the Committee on Foreign Investment will interfere in the transaction.

Another factor is that China's rapid economic growth can bring higher returns, although its growth rate has slowed down. Deloitte's survey shows that the size of mergers and acquisitions in the United States may increase slightly, but it is unlikely to change significantly.

When American electric car battery maker A123 Systems won federal grants in 2009, politicians from both parties were encouraged. However, after three years, the company claimed bankruptcy and became a prey acquired by the Chinese battery factory Wanxiang Company. Many members of Congress stated on the 10th that the acquisition of Chinese companies would threaten the national security of the United States.

The company's transfer auction was held secretly in Chicago last week, and was finally bought by Chinese auto parts maker Wanxiang Group for 260 million yuan, which immediately attracted close attention from Congress and the Obama administration. The Obama administration believes that the federal government has a say in the final ownership of A123 Systems.

Members of both parties in Congress expressed concerns about Wanxiang's acquisition attempts a few weeks ago, arguing that there were few public figures showing Wanxiang's internal structure, management and affiliation. "The acquisition creates serious national security concerns and threatens the U.S.'s innovative position and the job market," said Congressman Vizenger.

Wiesinger said A123 Systems has many defense supply contracts worth millions of dollars, "including military vehicles, drones and unmanned reconnaissance ships, power grids, unmanned ground and portable power systems, high-energy radars and "The acquisition of advanced armored equipment, etc." may lead to the possession of US military secrets in the hands of spies in hostile countries.

However, the acquisition contract shows that A123 Systems existing defense contract will not be transferred to Wanxiang, but to the United States' Navitas Systems.

Senators Glasley and Xiong En announced on the 10th that they requested the Ministry of Finance to conduct a strict and comprehensive review of the bankruptcy acquisition of A123 Systems. "Ultimately, taxpayers will pay for companies that are already owned by China," they said.

The acquisition is still not finalized, as approval from the Treasury and the Federal Bankruptcy Court is ultimately required. The company's acquisition hearing is scheduled to be held on the 11th. The federal government firmly believes that the new owner of the company after the change of ownership needs government approval.