Legal Issues Of Foreign Mergers And Acquisitions Of Listed Companies In China

M&A is a general term composed of company merger and acquisition, while the former means an advantaged company buys over another company's entire assets to form a new company, and the latter means a company acquires a number of stocks of another company through public channels to obtain its control power and management power. M&A is usually in three forms, that is, company merger, asset acquisition and stock acquisition. Each of them is considerably different in subject, effect, nature and legal character, etc., though alike in some ways; therefore, they are playing different roles in market economy. As far as I know, public company M&A is just as neutral as other market behaviors: exerting both positive and negative impacts, supplying both advantages and disadvantages.At present, the main laws in china to regulate ITM, including company law, stock law and other related law. In particular, stock law made a special stipulation in chapter on ITM of companies operating on the market, but it gave no definite provision on ITM f foreign capital.Owing to the international transition of the controlling power in ITM over native interests as well as the need to defend economical sovereignty, every country in the world always takes some legal measures to regulate ITM for companies of operating on the market. With China s participation into the WTO, it is an important task for legal circle to analyze the present legislation and then establish a set of suitable legal mechanism on ITM of foreign capital for companies operating on the market.This paper, preceded from basic theories of ITM of foreign capital,discussed its conception, method, legal features and value. In part two, based on the analysis and comparison to the legal regulations on ITM of foreign capital in developed countries, it points out the reference significances for our legislation.Thirdly, after a rather comprehensive analysis on our legislation, it reveals some mishaps and causes of our legislation on ITM of foreign capital.Finally, with a revelation to weakness of China s legislation on ITM of foreign capital for companies of operating on the market, it puts forward some suggestions for further perfection, in hoping to progress of China s legislation and establish the law rules according with Chinese reality and international practice.