The Research Of Merge Strategy For Chinawater Affair Market

Currently, there are over1700sewage treatment companies, of which approximately40%loss. In addition,10biggest sewage treatment companies accounted for only22%of the market share, indicating that the low degree of industry concentration. With the development of urbanization, the Chinese city water industry represented by water supply and sewage treatment will become the world’s largest water industry market in the next20years. China’s water market is in the early stage of the development of market-oriented, it is vague and imperfect system of water market policies from the industry, it is the decentralized and loose business from the industrial, it is operating regional monopoly and inefficient from the layout of the city.In the past few years, many foreign and private capital investments in the water industry on a large scale.at that time investors pursue short-term interests by sacrificing long-term profits and expand blindly. However, due to the impact of the financial crisis, many investors withdrawn the funds from the water project, this action lead to many sewage treatment projects face tight cash flow problems. In view of substantial capital expenditure will be used to build water affair in the future, the Ministry of Housing through the relevant regulations to push forward and explore financing for the construction of city water supply or sewage treatment industry by Public-Private-Partnership, so as to achieve the privatization of city water supply and sewage treatment. Most of the privatized water companies are positioning between two extreme modes: one is owned by the central or local government, the other is commissioned through a fixed term contract operations, and the operating period normally is20to30years. From now on, there will be more projects about equity transfer in the wastewater treatment industry, which may bring acquisition opportunities for the enterprises with rich experience and abundant cash.Merger and acquisition(M&A)is the better way of quickly gathering capital in merchandise condition.With the developement of market economy, Chinese enterprise will face the unprecedented threat and challenge. Therefore, internal enterprise must grow up by extending the economic scale, strengthening itself, increasing economic. An important fact must be recognized that the result of M&A dissatisfied with us. One of factors leads to the failure of M&A is the fixed position of M&A is ignored by the enterprisemanagers.In fact, the fixed position of M&A target plays an important role to improve successful rate in M&A of the enterprises. Based on the basic knowledge in this field, this paper aims at discussing how to decide M&A target,especially in China water affair market.