Research On The M&A Case With Loans Between Hanking Mining And Shangma Mining

Mergers and Acquisitions, in the environment of market economy, is one of important means for business expansion. Through mergers and acquisitions, enterprises can rapidly expand the scale, improve competitiveness and optimize the resources allocation. The international development experience has shown out that it is an available shortcut to enhance the strength and business scale for enterprises. With the trends of M&A intensified globally, vigorous development of M&A activities has been achieved in China.M&A loans, as one of financing instruments in leveraged buyout, are commonly applied in the US M&A cases. Overall, of the US M&A and financing activities, the commercial bank loan has been accounted for more than 20%. In China, the limitations of M&A loans has been released long ago by government, however, among the M&A activities occurred in China, cases applying M&A loans are relatively rare, which is due to the unfamiliarity of M&A loans business, and treatment differences on risk assessment and control between commercial banks. Since this kind of M&A has become quite common in foreign countries, the author thinks that M&A activities with loans should gradually increase prospectively with the changing economic circumstances in China.Therefore, this essay chooses the acquisition case occurred between Hanking Mining and Shangma Mining with M&A loans applied as the object of research, through the analysis and research on the acquisition method and risks related to the loans in this case, hoping to exert positive influences on promoting the check and approval of M&A loans, provide referred experience for similar domestic M&A activities in the future, and to complete the form of M&A in China, promote the comprehensive development of the capital market.This essay is basically divided into four parts:The first part is an introduction, which describes the background, purpose and significance, summarizes the main content and research methods. The second part is the description of case, which introduces the condition of each company involved in the acquisition transaction, as well as the relationship between the companies and the whole process of the transaction, in order to make a basis for the case analysis below. The third part is the case analysis, which describes research on the acquisition valuation, prospects after the transaction and potential risks with related theoretical knowledge. The fourth part is the countermeasures and advice, which summarizes the results of the case research and provide some available advice under the present situation.This essay is aimed at bringing forward practical advice on avoiding risks in M&A activities applied with loans through analysis and research on the case, and hoping to provide reasonable and effective reference for domestic M&A activities in the future.