Listed Companies In China M & A Payment Method

This dissertation analysis the considerations for equity and assets in Mergers &Acquisitions(M&A)involving China's listed company,namely the terms of payment．In the first chapter,a definition and some dominant western theories on M&A aregiven.A merger or acquisition technically is a combination of two or more companies inwhich all but one of the combining companies legally cease to exist and the survivingcompany continues in operation under its original name．M&A falls into 3 categories:horizontal,vertical and conglomerate by industrial strategy.M&A theories analyze the causes of M&A and how it increases of the efficiencyof the two parties of transaction．In the second chapter,some major theories are introduced．The theoretical analysis,involving capital structure,explores why stockholder and manager choose a specific payment．The derivative theories coming up are:M．M theories,cost of agency,asymmetric information,corporate control and financial synergy．The third chapter analyzes the terms of payment of M&A,dominant factors,theadvantages and disadvantages of each payment．The payment is generally classified as cash,equity exchange and mixed payment．In a transaction,the acquiring company and the merger candidate perceive the payment in different point of view．Listed company may lie on the positions of acquiring and acquired part．As an acquiring company,listed company takes the following into consideration:the feasibility of payment；the controlling power of majority stockholder；financial risk,and cost of financing．As a merger candidate,listed company shall take into account the On-going business,tax,and controllingpower．The fourth chapter explains functions of the board when a merger is inevitable,by introducing the"Business Judgement Rule"and typical"White Knight"case in USA．When the board of listed company facing an offer,the primary duty of directors is to maximize the company's value and bargain for the most profitable price for stockholders．The fifth part gives an overview of the M&A history in China's securities market.It stresses on the forms and specialties of payment on present phase．The sixth chapter analyzes the problems underlying various M&A cases,and itsinfluence on the choice of payment．1,The form of payment is manipulated by the majority stockholder and localgovernment． 2,Transaction of equity or assets aims to keep the company qualified to be listedon exchanges．3,Transaction of equity or assets aims to steeply drive up the stock price．4,Majority stockholders illegally seize on operating capital of listed company．The seventh part argues that the existence of state．．owned non．．tradable share isthe rootstock of the problems and it lies in the way of further M&A．The lack ofderivatives is caused by the constraint of deficient legal system．Tendency:the M&A cases will focus on the transaction of state-owned share andentry of foreign capital．The payment for M&A will be more verified as the marketexpanding．...