The Yangtze River Chemical Fiber Acquisition Of The Pearl River Chemical Fiber

With the development of socialist market economy, capital operation and management has played a critical role in the enterprises' operation and development. Meanwhile, merger and acquisition is one of the core content of capital operation and management upon property right, and it's also one of the most common forms of enterprises' capital operation and management. Merger and acquisition is an important approach for enterprises to enlarging their production and operation scales implementing the integration or diversification strategy, adjusting the structure of their products and improving their competitiveness in the market.In order to enlarge its production and operation scale, increase the market share of its products and improve profit, ChangJang Chemical Fiber Company Ltd.(CCFC) acquired ZhuJiang Chemical Fiber Corporation(ZCFC) which was faced with bankruptcy in 1995. However, CCFC didn't reach its target and goal which it had expected through the above acquisition .This paper describes the acquisition case between CCFC and ZCFC ,analyzes superficially the strategic intention of acquisition, decision-making process and the role of government in the merger and acquisition between enterprises etc, from which we hope to get some inspiration for the merger and acquisition between big enterprises in the future .Meantime, this paper can be used as a teaching case in the MBA courses.