Analysis Of Mutual Win On Mergers And Acquisitions

As a common form of external trade strategy, mergers and acquisitions have become a hot topic of Chinese market economy at present. With China's entry of WTO, foreign fund entry and deepening state corp. reform, like other western countries, China has entered another climax of merger. Especially for Chinese auto industry, after two years high-speed growth from 2003 to 2004, China has become the only biggest auto market that exists in the world. The top ten world auto Companies has entered and Chinese auto companies have also found their strategic partners. It formed the strategic situation of "3+9". And then, M&A has developed from traditional "China-foreign"mode to other forms, such as "China-foreign-foreign","China-China-foreign"and etc. In October 2004,Chang'an Auto announced its acquisition of Jiangling Auto and established Jiangling holding company Ltd. This cooperation was inseparable from their investment partner—Ford Auto. However, the possibility of real success in acquisition stands at only 49%. It thinks that the real success in any act of acquisition lies on mutual win achieved by all parties concerned. Just as anatomizing a bird, this paper is focus on searching a method, which enable all parties concerned to win, and trying to raise the possibility of success in acquisition through the proper decision. Through introducing the basic theory and current situation of M&A, this paper demonstrates the current trend of acquisition and illustrates the importance and urgency of this problem. Based on this, the background, process and outcomes of Chang'an Auto's acquisition of Jiangling Auto is introduced, making the readers learn about the same amount of information as author, for making the following analysis jointly. Next is the key part of this paper. Based on the analysis of the M&A motivation of each party, the dissertation analyzes the factors to effect the decision from object company choice, value evaluation and terms of payment etc., anatomizes the process factors one by one, And the decision-making of two parties in M&A is presented. Finally, the integrated judging method -Mutual Win Radar Diagram Analysis Method is inducted. It aggregates the above factors and weighted it to simple quantization index to jump to conclusion. This dissertation forms "General-Disparting-General"structure, combining theory with practice. It has reality meaning and innovation, and can be a guide to China auto industry, even the large merger in other industries.