Competitiveness Of The Iron And Steel Enterprises, Research, And Mergers And Acquisitions

Our enterprises are always under the pressure of competitiveness. With the globalization of economy, they have to meet the challenges both inside and outside China. It is urgent for the enterprises to manage to exist and get stronger in the domestic and international markets.Iron and steel industry is the backbone of our economy. Its development and competitiveness play an important role in our state power. Although our output is number one in the world of iron and steel manufacture, we are far behind in terms of technology, process, and value added products. At the same time we are facing different troubles such as overproduction, low concentration and pollutions, etc. All these factors affect not only the competitiveness but also the safety of our state economy.The writer believes that merger and acquisition are the best way to solve the problems of our iron and steel industry. In the macroscopic view, merger and acquisition can curb the over investments, while more investment would make the market fluctuate seriously and make our environmental pollution worse. Green field investment also brings more anti-dump cases and more pressure on energy and resources.In order to get rid of the obstacles from administration, the enterprises can merge over capital markets by following the economic rules. Merger and acquisition will help the enterprises to enlarge in scale so that they will avoid being swallowed by foreign companies easily.In the microscopic view, the competitors will become less by merger and acquisition. The losers will disappear from the markets or become the partners of the winners. The enterprises can help the target companies to improve their abilities in technology and administration through allocation and synergy effects. An enterprise with advantages can also merge a bigger company by leveraged buyout. In this way the enterprise will save money and develop rapidly.In a word, only when the enterprises realize the importance and benefits of merger and acquisition, can they take advantage of horizontal merger, vertical merger or conglomeration merger to upgrade their competitiveness abilities and make progresses. In this way, we can realize our dream of a powerful country in term of iron and steel manufacturing.