Torch Mergers And Acquisitions Integration Of Resources Efficiency

From early nineties of last century, Strategic alliance has become mainstream of world fifthwaves of M&A. M&A in china has transferred from the form of mainly buying public company with the only aim to get money from investors to the one of strategic alliance with the aim of long-term development. While resources possessed by an enterprise are limited, those belonging to whole society are resourceful. It is almost impossible to swiftly develop by wholly depending on the resources an enterprise possesses. Only by capitalizing on social resources and optimizing allocation of resources, developing socialization resources, operating internationally, managing scientifically and utilizing the specialized finance tools such as merge and acquisition, restructure can an enterprise develop quickly by reducing the lead time of R&D new products. Especially when a company changes its strategy, M&A as a cost-effective way to expansion can maintain the sustainable profit by acquiring the market share of target companies.Restructured in 1993, Torch Corporation Ltd (hereafter as Torch), formerly known as Hunan Zuzhou Plant is a nationally key enterprise. Two years after its IPO, Torch lost seasoned issue and stocks dividend because its return on net asset did not meet the bottom requirement. After restructure, Torch introduced new philosophy and redesigned strategies which is led by industry research and strengthen developing sector by strategic planning and which cultivating core competence by M&A and consolidation.We can draw some conclusions from the M&A cases of Torch:1 M&A is a key methodology to increase capital and relocating social resources. It enjoys the advantages of increasing the capital swiftly, reducing the entry and exit barriers and improving the efficient relocation of social resources.2 M&A should form new core competence. Core competence is the combination of both social resources and enterprises resources. Core competence is the combination of organization capital and social capital.3 . Cases tell us, corporate finance is a basic financial tool helping small enterprises to grow fast.