The Research About Asset Restructuring Of State-Owned Enterprises

Asset structure M & A is an effective means of strategic adjustment.It is also a necessary step for reform of property rights.With the rapid development and the entry of WTO,the M & A process has accelerated rapidly.The demand of acquisitions within the industry and between the industry is very strong.The large state-owned enterprise reform has entered a substantive stage. Large state-owned enterprises, especially the central enterprises have increasingly become a major force in mergers and acquisitions. A new round of mergers and acquisitions has been fully set off. At the same time, the relevant central authorities also continue to strengthen the guidance,standards and regulations of M & A activities,and Introduce a number of management practices and regulations.eg,<Acquisition Management Practices Of Listed Companies>;<Qualified Foreign Institutional Investors Securities Investment Management>;<Restructuring Of State-owned Enterprises Using Foreign Capital Interim Provisions;Suggestions On Regulating The State-owned Enterprise Reform>;<The Notice On Strengthening The Supervision Of The Acquisition Activities Of The Central Enterprises> and so on. These measures and regulations for the promotion of China's merger and acquisition activity toward standardization and rationalization played an important role. The merger and reorganization of state-owned enterprises has become a model in the industry, but some have had serious adverse consequences. Therefore, it is necessary to propaganda the successful experience of the restructuring of state-owned enterprise,to further promote the reform of state-owned enterprises in China.The concentration of cement industry is too low,cement capacity is seriously excess.The basic tendency of cement industry is to raise industrial concentration,so as to promote the stable and healthy development of the industry,which is in line with the national policy guidance on the cement industry. JiDong Cement is not only a leading enterprise in the cement industry,but also has the best benefit in the north of China among the cement enterprises.It has the ability of merging and acquisitions.This paper focuses on the typical case of JiDong Cement 's successfully merging Jilin SongJiang Cement.JiDong cement in 1999 under the context of the financial crisis carried out the strategy of 'consolidate North China,advance the Northeast,open up the Northwest'.Considering the social responsibility of the state-owned enterprises JiDong Cement made a decision to merge Jilin Songjiang Cement on the verge of bankruptcy.Jilin Songjiang Cement carried heavy burden with a lot of problems,which made the acquisition of Jidong Cement face enormous risk. The shareholder of JiDong Cement is BoHai company,it has no intention to restruct JiLin SongJiang company,because JiLin SongJiang was on the verge of bankruptcy,the possibility of successful acquisition was very low.The reform wave of state-owned enterprises had not formed.There was rarely policy paper about restruring state-owned enterprises,which leaded to operating the restructuring more difficult.The government palyed a significant role in the coordination. Thirdly,JiLin SongJiang Cement had poor assets, equipment obsolescene, management mechanism was behindhand, the concept of the staff was behindhand too, the company - carried heavy debt burden and social burden.Fourth,The dark forces made bad influence on the production and daily business activities. The dark forces control the purchase source and some distribution channels, and they did not return back money all the year round which resulted in cash flow difficulties and eroding the company'interests.At the same time,they often made threats to the leaders which seriously affected the normal operation of the company. Finally, JiDong Cement was facing a huge threat to competitors.The brand "StoneShield" in the Northeast had not been widely recognized,and the main positions of YaTai Cement was the northeast, so YaTai Cement was the major competitor. Facing huge challenge, the way of acquisitions was particularly important.After consultations JiDong Cement finalized a "rent-to-sell" approach to restruct part of effective asset. Mergers and acquisitions had made the final great victory,Jilin Songjiang Cement finally came back to life. Through this case,we summed up the relevant experience of JiDong Cement.state-owned enterpreses should guideline on corporate strategy in the process of asset restrcturing. Determining a reasonable goal to ensure the integration of M & A. Sending Outstanding leaders to lead the asset restructuring; The coordination between acquirer and acquiree,enterprises and profession;Searching for the support of the government policy,creat a favorable external environment. Hoping that "Jidong model" of state-owned enterprise assets restructuring has certain guiding value.