Association Of State-owned Enterprises

Merger & Acquisition(M&A) is a new thing in China,although it has experienced over 100 yeaar抯 development in western eountries.M&A is a way of capital restructuring, which has great significance to the whole economic reform and economic development in China,especially to settle the problems faced by the state-owned enterprises(SOE5).Under the influence of the planed economy system, there are many problems in the SOEs,such as inseparable functions of government V and enterprises, obscure property rights,fuzziness of rights and responsibilities and inefficient maanagement etc,which leaad to out-of-date facilities,deficiency of technology innovation, and low efficiency of investment, etc. There are many methods to settle these problems, M&A is among the effective ways. This paper probes both theoretically and practically into the mechanism of M&A .Before starting to analyze the problems of M&A of our SOEs, it firstly analyzes the principle of M&A from two aspects of motivation and effects. It also introduces the meaning and types of M&A. Based on the analyses of the theory of M&A, this paper discusses the M&A process of China抯 SOEs, such as problem of government behavior orientation, problem of capital evaluation of enterprises, problem of laws and regulations, problem of obstacles from stock market, problem of social security, problem of blind M&A, and so on.In order to solve these problems, it is necessary to clarify the behavior criterion of government in the process of M&A, build up normative capital maarket and finance tools, establish sound social security system,establish and cconsummate the relevant law system,choose the suitable type of M&A,establish and consummate the capital evaluation system and surveillant organizations for property rights trades.