Research On Cross-border M&A Of Trade Leading Enterprises In China

The Foreign Direct Investment (FDI) has two styles: One is Establishing-Investment, or named"Green-field Investment", the other is"Cross-border M&A Investment"; it means M&A between domestic companies and foreign companies. Since the middle of late 90's, as cross-border M&A Investment becomes the main way of foreign direct investment, Cross-border M&A Investment becomes the subject which the domestic and international scholars study more.At the end of 1990s, China government has paid attention to the gigantic cross-border M&A wave in the world and adjusted the policies of attracting foreign capital gradually. Meanwhile, the cross- border M&A has become an important researching problem. Especially after China's accession to WTO, the relative laws and regulations are carried out faster than before, which clear away the barriers for foreign capital to tip into China's market. As to the industries that foreign capital M&A can come into, most of them has realized being opened to the outside world basically, including some fields tightly related to the development of economy, such as automobile, finance, services and so on. As to the object of foreign capital M&A, the state-owned cooperation and listing companies has got the permission to attract foreign capital. The"Provisional Regulations Regarding Mergers and Acquisitions Involving Foreign Investors and Domestic Companies"implemented from April 12th, 2003, allows foreign capital to interfere into nearly all kinds of enterprises.M&A is a hot issue which is studied by the domestic and international scholars in recent years. Accompanied by China's Accession to WTO and utilization the policy of absorbing foreign direct investment, M&A activities of Multinational companies increase obviously and demonstrate some new tendencies. M&A scales of the individual event are ascending constantly; The demands for control power to the company has improved constantly, and over half of the trans-corporations obtain control power of company absolutely or relatively through M&A; The range that the cross- border M&A in China is more and more extensive; cross- border M&A in China is more and more systematical; from a single, scattered merger to series merger gradually, even the merger of the whole trade; From the object of merging, what the trans-corporation merges is mainly large-scale and super-huge enterprises which are profitable, have a stronger trade advantage and high resources value. If these trade leading enterprises are merged, then these trades which are important to national economy security and industry security will be monopolized by trans-corporations of foreign countries.Some local governments examine cadre achievements size by the standard of how much foreign investment has been absorbed, so some local governments ignore the significant of leading enterprise and attract trans-corporation to merge them actively. Some local governments have not considered the state of enterprise, even promote by force of administration means. Some developing leading enterprises are captured by trans-corporation which bring harmful effects to leading enterprises and Chinese macro-economy, threaten the security of national economy and industry seriously.The topic of"Foreign Mergers and Acquisitions threaten the security of Chinese industry"has already become the focus. The government must treat foreign mergers and acquisitions with caution. Though many scholars have already noticed this question, there is no much study on this problem and there is no systematic analysis about the influence brought to macro-economy, so, the study on this subject has realistic meanings.This thesis makes a systematic research about the relative problem of cross- border M&A trade leading enterprises and is consisted of seven chapters.Chapter one is introduction. The main contents of chapter one are the background and significance of the topic, the present study conditions, the train of the thought and the innovation of the dissertation.Chapter two is the relevant theoretical explanation on M&A. The first section defines M&A, cross-border M&A. The second section analyzes theory about the main motive of cross-border M&A.Chapter three is an important part and is consisted of three sections. The first section introduces the trend of cross- border M&A and analyzes the reason why cross-border M&A develops rapidly. The second section, turn sight inward, explains the development trend and new traits of cross-border M&A in our country from the aspect of scale, trade, target enterprise, control power of M&A and the systematic and united M&A, etc. The third section, in considering the Chinese conditions, analyzes specific motive of cross-border M&A trade leading enterprises, including strong confidence in Chinese market and advantageous of trade leading enterprises, rapid access into Chinese market, obtain market advantage.Chapter four summarizes the positive and negative effects of cross-border M&A trade leading enterprises. Cross-border M&A trade leading enterprises practices like a double sword. On one hand, it can advance the reform of the monopoly industry of our country, promote the state-owned enterprise reform, improve company's administration structure, remedy the fund shortfall of reform, introduce the advanced technology and experience of management at the same time, bring about an advance in the whole trade and improve our country market concentration degree; On the other hand, cross-border M&A trade leading enterprises will bring some negative effects too, including possibility of forming foreign monopoly, losses of state-owned capitals and assess, threaten the security of national economy and industry seriously, assault nationality's famous brand.Chapter five is a case study. In order to explain the current situation and their existing problem of cross-border M&A trade leading enterprises vividly, from the principle which is theory should get in touch with practice, we emphasizes study a typical M&A cases for these problems-M&A of Xugong by Carlyle Group.Chapter six points out the problem of our country in cross-border M&A trade leading enterprises, including the behavioral deviation of the government in M&A, M&A regular system, property relations and right protection of relevant sides.Chapter seven puts forward the suggestion on the basis of analyzing the exited problem. This chapter holds a view that China should enact and complete relevant laws and regulation systems as soon as possible, standardize governmental management, improve the examination and approval of cross-border M&A, complete gradually the social security system; speed up the construction of capital market and standardize assets evaluation so as to prevent losses of state-owned assets.