Company Acquisition Study--Dongsheng Group Merge The Chongqing Switchgear Plant

Enterprise merger is the effective form of modern capital operation, the fruit of market economy, the most important form of capital distribution and in the modern economy, and the economic choice for realizing the enterprise development strategy. Enterprise merger as a kind of transaction in the capital market is deferent from the normal commodity deals or internal lending in the content, style and course. It is a very risky economic activity with stronger operation artistry, among them; financial assessment and analysis in merging are keys to it's success or failure. It runs through the whole takeover and provides the reliable value foundation of the successful merger. And it also provides the security for the mutual integration between the enterprises after merger.This paper demonstrates the basic procedure and operating theory from the superficial to the deep and from theory to reality in the three parts. The first one is the classification of merger and standardizing definition of merger. Many scholars and their works have defined the merger, but the various definition cause the chaos of direction of research. So, the paper firstly carries on scale and benchmark that the definition suits not only international standard but our country condition. This part also classifies the mergers. The second part systematically sketches the theory frame and demonstrates the prevail merger theory from three the horizontal, longitudinal and mixed mergers. Finally, the most important part is the analysis of a real example of Chongqing switchgear plant. The paper stresses the financial affairs and chooses the cash flow approach after comparing and design the whole merger scheme.The paper can instruct in some degree capital flight in the state-run country reform. The merger value can be decided more agree with the market economy law through strict careful analysis. It is significant for the reform and regulating the merger affairs.