Analysis Of Tactics Of H-shares Returning To A-shares Through Stock Swap Absorption Merger

Enterprise merger and acquisition (M&A), as an efficient way of resource allocation and optimization, began in western developed countries. Since 19th century, five worldwide M&A waves have occurred along with a series of profound impacts on the world economy. Stock swap merger is a regular M&A mode in well developed stock markets abroad and has been rising in China from 1998. Since then, capital operation, asset management, financial innovation and stock swap absorption merger etc. have come up one after another as innovative ideas. Stock swap absorption merger has been developed with Chinese characteristics under the unique economic background, which attracts the attention and favor from more and more listed companies in the wave of H-shares returning to A-shares. Chinese enterprises are enlarging their scales through the stock swap absorption mergers in order to be listed as world class enterprises.This paper is written in the way from general rule to particular case by combining literature study and case study, analyses stock swap absorption merger activities of listed companies in China. By integrating theory with practice, this paper focuses on H-share company getting listed in inland stock market through stock swap absorption merger with A-shares. Such innovative mode brings multi win result and is of positive significance. It is hoped that the research findings of this paper may provide guidance to the future restructuring and integration of those enterprises with parent company listed in Hong Kong stock market and subsidiary company listed in inland stock market.Firstly,this paper introduces the background, aim and significance of the research as well as the structure, content and innovation of the paper;Secondly, it describes the theory of stock swap absorption merger and its development both in china and abroad;Thirdly,it tells the theory, mode and development course of dual listing, studies the tactics of H-shares returning to A-shares through stock swap absorption merger, draws attention to policy orientation and stock market trend, advises enterprise to suit itself in making policy of stock swap absorption merger, of which the key factor analysis is stressed;Fourthly, it focuses on the case study of Shanghai Electric's stock swap absorption merger with Shanghai Power Transmission & Distribution, introduces its background and motive cause, analyzes the pressures and industrial foreground faced by Shanghai Electric, presents scheme of the deal and relationship between the two parties, also delivers comments on the scheme and analyzes the demonstrative effect of multi win result and the purpose of refinancing achieved through such deal. Finally, the conclusion is drawn as follows: Stock swap absorption merger must be the preferential mode in M&A of listed companies; The government should play an active role in guiding enterprises to re-optimize and relocate their stock assets.The innovative work of this paper is that to locate the research angle of view, in close connection with the background of our times, at H shares merging with A shares through stock swap absorption, to create a new mode of M&A. By case study of the strategy, scheme and its significance of distinguished domestic enterprise returning to inland stock market from Hong Kong market, the conclusion is drawn that stock swap absorption merger is a preferential mode in a listed company's M&A activity.