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Papers on M&A financing
The property rights trading market also provides a price discovery platform for mergers and acquisitions of non-listed companies, which is an indispensable part of a sound capital market system.

At present, with the basic completion of the share-trading reform, the function of China's capital market has undergone major changes, and its financing function has not only been strengthened, but also its role as a platform for corporate mergers and acquisitions will be further revealed. This is not only conducive to the prosperity and development of the capital market, but also conducive to promoting state-owned enterprises to play their advantages and talents in the capital market and further strengthen and improve their core competitiveness.

Promote mergers and acquisitions and give play to the resource allocation function of the capital market.

The important function of capital market is to provide places and mechanisms for financing and resource allocation. If the company's listing mainly uses the financing function of the capital market, then mergers and acquisitions mainly realize the resource allocation function of the market. In the process of merger and reorganization, the parties concerned influence the price signal of the capital market by competing for the control right of enterprises in the capital market, thus guiding the redistribution of resources. With the development of economic globalization, this form of resource redistribution has become the most effective way for modern enterprises to obtain the best scale and maximum strength. If it is not excessive, it can also be said that it is the characteristics of the times of the growth and expansion of modern multinational companies.

According to the data released by the British market research company, by June 20, 2006, the global announced M&A transaction volume had reached 3.46 trillion US dollars, setting a new record of 3.33 trillion US dollars in 2000. Among the largest 65,438+00 M&A events in history, 8 were announced in 2006. Although China's M&A started late, it has been highly valued by the top government in the past few years. In 2004, the State Council issued "Several Opinions on Promoting the Reform, Opening-up and Stable Development of the Capital Market", which clearly stated: "Encourage listed companies to carry out market-oriented M&A that is conducive to the company's sustainable development." I understand that the role of enterprise merger and reorganization in resource allocation is mainly reflected in the following aspects:

From the micro level, M&A is an activity of asset reorganization and property right transaction within and between enterprises, which is conducive to optimizing the ownership structure, improving the internal governance mechanism, improving the quality of growth and enhancing the core competitiveness of enterprises.

Macroscopically, taking industrial policy as the background, taking economic development as the goal and optimizing the core competence of enterprises as the content, M&A is conducive to revitalizing social stock resources, optimizing resource allocation, adjusting industrial structure and improving the rational distribution of the national economy.

Judging from the market effect of M&A, while optimizing and upgrading, M&A enterprises have saved some weak listed companies, especially those listed in ST sector. The asset quality and operating performance of these companies have been improved, effectively avoiding the delisting risk and ensuring the shareholders' rights and interests to a certain extent.

Since the establishment of the State Council State-owned Assets Supervision and Administration Commission, it has actively promoted the strategic adjustment of the layout and structure of the state-owned economy through various means, such as acquisition and merger, reorganization and listing, closure and bankruptcy, and achieved remarkable results. At present, the property rights exchange market that we are committed to developing has become an important part of China's capital market. According to statistics, since 2004, the amount of state-owned property rights transferred by property rights trading institutions in Beijing, Tianjin and Shanghai alone has reached 257 billion yuan, which has driven other mixed-ownership enterprises to enter the property rights trading market.

Respect market rules and create favorable conditions for enterprise merger and reorganization.

10 Over the years, the practice of mergers and acquisitions in China's capital market shows that in order to truly and effectively play the role of mergers and acquisitions in the allocation of resources in the capital market and ensure the healthy, sustained and orderly progress of mergers and acquisitions, we must fully respect market laws, strengthen the legal, institutional and normative infrastructure, and vigorously cultivate the internal mechanism of market resource allocation. The following aspects deserve great attention:

First of all, we should devote ourselves to establishing a perfect capital market system.

The merger and reorganization of enterprises with property rights transaction as the core must be completed with the help of capital market, and a standardized, perfect and developed capital market system is a necessary condition for effective merger and reorganization. A perfect capital market must have three basic elements: first, there are a number of enterprises with good quality, which is the cornerstone of the development and prosperity of the capital market. Without excellent enterprises with development potential, there will be no capital market with good development prospects; Second, effective market restraint and self-discipline mechanism; The third is strict and efficient external supervision. It goes without saying that compared with the current situation of China's capital market, the gap between requirements is very large. Establishing a sound capital market system requires unremitting efforts from all sides.

The second is to speed up the construction of a market with sufficient equity liquidity.

Through the share-trading reform, temporary non-tradable shares have obtained the right to circulate. With the gradual expiration of the lock-up period, the A-share market will realize full circulation, which makes it possible to use the market price as the basis of M&A pricing of listed companies. Therefore, we must improve the laws and regulations related to M&A and property right transfer as soon as possible. At the same time, the property rights trading market also provides a price discovery platform for mergers and acquisitions of non-listed companies, which is an indispensable part of improving the capital market system. It is also urgent to speed up the construction of a unified standard, standardized operation and nationwide networking property rights trading market.

The third is to create an environment that meets the inherent requirements of enterprise development.

The influence of M&A on macroeconomic structure comes from the cumulative effect of M&A cases, so we must pay attention to the effective implementation of M&A cases. From a realistic point of view, no matter what kind of dominant merger and reorganization, the enterprise itself is the real interest subject. Therefore, mergers and acquisitions should not only reflect the wishes and interests of investors, but also follow the inherent laws of enterprise development and safeguard the main interests of enterprises. Those mergers and acquisitions that violate the law of enterprise development, especially those led by administration, often become a burden to enterprises. Therefore, we should encourage and support enterprises to give full play to their subjective initiative, combine their own conditions, and scientifically choose the objectives and methods of mergers and acquisitions, so that mergers and acquisitions can be effectively implemented.

The fourth is to promote enterprises to improve the corporate governance structure.

In order to reduce the risk factors in M&A from the source, in addition to strengthening external supervision, the internal decision-making risk prevention mechanism is particularly important. Therefore, the State Council SASAC is actively improving the corporate governance structure of state-owned enterprises, standardizing enterprise management behavior, promoting the establishment of a scientific investment decision-making system, preventing enterprises from blindly investing, and effectively avoiding investment risks by implementing the pilot board system in wholly state-owned companies. In promoting the merger and reorganization of listed companies, we must attach great importance to the perfection and perfection of corporate governance structure of listed companies.

Standardize guidance and attach importance to solving problems in enterprise merger and reorganization

On the one hand, the merger and reorganization of listed companies has become an effective means to promote the adjustment of the structure and function of the securities market, on the other hand, it has really played a positive role in improving the corporate governance structure, optimizing the allocation of social resources and adjusting the structure and function of the national economy. However, due to the late start of China's capital market, the weak market infrastructure and the continuous improvement of relevant laws and regulations, many outstanding problems have been exposed in the process of M&A, which need our study and solution.

First, the blind expansion of enterprises is more serious and the risk awareness is weak.

At present, some enterprises are lack of risk awareness, aiming at blind expansion and spreading, and take mergers and acquisitions as the main way of low-cost expansion. A large number of enterprises that are not conducive to their own development are merged, and investment management is out of control, which eventually leads to the failure of mergers and acquisitions. Some have fallen into the abyss of bankruptcy, with huge losses and profound lessons. Therefore, in the process of merger and reorganization, we must properly handle the relationship between being stronger, better and bigger. It is much more important to be stronger and better than to be bigger and more scientific. If an enterprise is strong and excellent, it can't develop and grow. But blindly pursuing greatness, even if it is realized, may not be sustainable.

The second is to violate the principle of market economy and engage in non-equivalent transactions.

The purchase, sale and replacement of assets in the merger and reorganization of listed companies can really improve the financial situation of some companies quickly and effectively. For example, for companies facing the risk of delisting with poor performance, the purpose of shell protection can be achieved; For companies with refinancing needs, they can meet the conditions for issuing new shares and give full play to the financing advantages of listed companies. At this time of interest temptation, there are many speculators engaged in non-equivalent transactions and restructuring activities in M&A. In the long run, this kind of behavior that violates the principle of equal value transaction in market economy will inevitably make the party whose interests are damaged in the transaction seek compensation for interests in an abnormal way. Some enterprises attach too much importance to obtaining the status of controlling shareholder, and inject high-quality assets into the acquired party at a low price through mergers and acquisitions, without paying attention to the organic combination with the acquired party's business and the improvement of corporate governance structure and internal growth mechanism, resulting in deviation in motivation and effect. In fact, this is not a real merger and reorganization. At best, it is only the transfer of profits and assets. Over time, it will also make the original high-quality assets lose profitability.

Third, frequent hasty and habitual mergers and acquisitions.

Some enterprises lack sufficient planning for the integrity, long-term and feasibility of resource reallocation, and suffer from "myopia" in enterprise development and "color blindness" in resource allocation, which leads to many mergers and acquisitions that only improve the company's performance in a short period of time, without bringing essential changes to the company's operation, and then get worse year by year, even worse to ST and delisting. Other initial mergers and acquisitions failed to solve the company's fundamental problems. In order to preserve shell resources, they seek to solve the problems that cannot be solved by reorganization, thus falling into the strange circle of "habitual reorganization disease" According to the statistics of relevant institutions, this kind of reorganization has reached about 10 times, but there are still more than 20 listed companies whose performance and operational ability have not been substantially improved.

Fourth, M&As hyped for the secondary market occur from time to time.

At present, the stock price in the secondary market has high expectations for the target of mergers and acquisitions, and the stock prices of listed companies with restructuring expectations in the secondary market often rise sharply in the short term. The excess profits in the secondary market make some mergers and acquisitions deviate from the original meaning of mergers and acquisitions. They don't decide the objectives and strategies of M&A according to the development needs of the company, but merge for the short-term interests of the enterprise, and pursue whatever concepts are popular in the secondary market. This kind of merger and reorganization not only failed to optimize the allocation of resources, but even caused a mismatch of resources, created a stock market bubble, and left endless problems.

With the goal of strengthening and improving state-owned enterprises, we will intensify the merger and reorganization of central enterprises.

With the basic completion of the share-trading reform, the main institutional defects in China's securities market have been eliminated, the liquidity of the market has been greatly enhanced, and the importance of mergers and acquisitions of state-owned enterprises has become increasingly apparent. Facing the new situation, we will aim at strengthening and improving state-owned enterprises, actively support the merger and reorganization of state-owned enterprises, and promote the development and growth of China's capital market.

First, further play the role of listed companies controlled by central enterprises in capital market mergers and acquisitions.

At present, central enterprises hold 194 listed companies, with a total share capital of about 300 billion shares, accounting for about 22% of the total share capital of all listed companies in China, and most of them are distributed in key areas related to the national economy, people's livelihood and national security, with great market influence. In a sense, the quality and development potential of these companies determine the quality and sustainable development capacity of China's capital market. Therefore, taking effective measures to improve corporate governance, ensure standardized operation, promote stable growth of performance, and constantly become stronger and better is not only the fundamental driving force for the healthy development of the current capital market, but also the focus of establishing the confidence of public investors. In the future, we will continue to encourage state-owned controlling shareholders to become stronger and better listed companies controlled by central enterprises through asset restructuring, joint mergers and acquisitions, technical investment and financial support, and constantly enhance their ability to integrate market resources.

Second, continue to intensify the restructuring and listing of state-owned enterprises to provide a better platform for mergers and acquisitions.

In recent years, the reorganization, restructuring and listing of state-owned enterprises have been increasing, which has played a positive role in optimizing the allocation of state-owned resources, promoting the efficiency of state-owned economy and improving the corporate governance structure of enterprises. At present, a number of large state-owned enterprises such as Shenhua Group, Rainbow Group, Netcom Group, China Building Materials Group, China Communications Group and China Coal Group have successfully listed overseas, and Baosteel, Wuhan Iron and Steel Group, Angang Group and China Telecom will also list their main businesses as a whole. At the same time, local SASAC has also made active efforts in promoting enterprise resource integration and enhancing enterprise development potential. In the future, we will continue to encourage qualified large state-owned enterprises to achieve listing financing through domestic and foreign markets, and create favorable conditions for better and faster mergers and acquisitions in a wider range while diversifying their own investors and enhancing their business development strength.

The third is to improve the corporate governance structure of state-owned enterprises and standardize the behavior of state-owned controlling shareholders.

Establishing and perfecting the corporate governance structure of state-owned enterprises and standardizing the behavior of state-owned controlling shareholders are necessary conditions to prevent enterprises from blindly investing and effectively avoid merger and acquisition risks. To this end, we will continue to promote the construction of the board system of central enterprises in accordance with the requirements of modern property rights system; Through the shareholding system reform and the introduction of strategic investors, we will promote the diversification of investment subjects and the scientific decision-making mechanism of enterprises. In addition, we are also working hard to formulate normative documents on the management of state-owned shares of listed companies after the share-trading reform, and strive to make the behavior of state-owned shareholders, especially state-controlled shareholders, more scientific and standardized, and inject more vitality into the healthy and stable development of the capital market.