Mergers And Acquisitions Theory And Decision Analysis

Capital accumulation and concentration are inherent requirements for the development of market economy, and the , merger and acquisition act as an important accelerator in this process. Most of western countries have been rapidly expanding their business dimension through the merger and acquisition since the past century, to promote industry upgrade and optimal arrangement of capital structure, therefore creating a lot of giant and multinational corporations and further, having a profound impact on both their own economic development and the international economic structure. As the development of social economy, the integration between the new economy and the traditional economy becomes an unavoidable trend. More and more business companies are facing a challenge how to grasp this opportunity to promote their organization upgrade. The most important thing for them to do now is to study some successful domestic and international merger and acquisition cases. This essay elaborates the merger and acquisition theory and business development and strategic transfer.1. Define the term. The merger and acquisition are commonly known as M & A. M & A are divided into several categories according to different standards.2. Systematically introduces M & A theory commonly used in the west. They are theories of: efficiency, Principal-Agent, transaction fee,undervaluation, market power and wealth real locat ion. Then we draw a conclusion that M & A were driven by many factors rather than one. In general, the combined company will unite companies that are goal congruence and produce more efficiently than restructuring efforts.3. Study and analyze the inherent drive force, the motive for profit maximizing and competition, and the effect of M & A in the western countries. The conclusion is: cooperation in operation, finance, market share, practices as following.4. Study and analyze M & A theory and the motivation in China. M & A weredriven by government, business development, favorable policy, competitive advantage, operational mechanism, finacing and property right. Explain the motivation and the effect with two famous cases: China Petroleum/China Chemistry and Qingtao Beer.5. Systematically study the strategy during M & A. The first step is to plan for M & A based on the purpose and to choose the target. The second step is to evaluate the target. The western theories and the general rules in China are helpful in evaluating the target and choosing settlement method for M & A.6. Analyze the case in detail: Qinghua Tongfang acquired Jiangxi Radio Manufacturer.