China Building Materials And China National Materials Corporation Convertible Merger Motivation And Effect Of Research

With the rapid development of China’s market economy and increasingly fierce competition at home and abroad,enterprises need to constantly expand their scale if they want to occupy the market and occupy the leading position in the competition.There are many ways to grow a business,one of which is a convertible merger.Compared with other merger methods,convertible merger has lower requirements on cash transaction,which will not cause a large outflow of corporate cash and has a small limit on the amount of financing.Instead of cash transaction,equity conversion between enterprises can achieve the purpose of optimizing asset structure and expanding enterprise scale.In recent years,China’s large state-owned enterprises are deepening reform,and more large enterprises are willing to restructure their assets by means of convertible merger,so as to improve the asset structure,industrial layout and governance structure.China’s cement,steel and other building materials industry overcapacity,industrial structure urgent adjustment.China building materials and sinoma share are both leading enterprises in China’s building materials industry.Under the background of overcapacity in the building materials industry and supply-side structural reform,China building materials and sinoma share choose the method of stock exchange and merger to deal with overcapacity,adjust the business structure and seek the way of development.But whether convertible merger can really bring new life to companies in industries with overcapacity needs to be further explored.This paper takes China building materials convertible merger as an example to study the motivation and effect of China building materials convertible merger.As the two giants of the building materials manufacturing industry,as well as the two giants of the overcapacity industry,in order to seek the way of development,they adopted the method of convertible merger and opened the road of "two materials" reorganization.This paper analyzes the effect of stock exchange merger from five aspects: the position of China building materials in the global building materials industry after stock exchange merger,the adjustment of enterprise business structure,synergistic effect,cost reduction and efficiency increase,and enterprise value.Based on the analysis in the effect of the merger,using event study method,to explore the change before and after the merger announcement of stock prices in the Chinese building materials change and the change of the cumulative excess yields to market performance,and through the financial method,analysis of China’s building materials in merger synergies andthe impact on the enterprise production cost and benefit.Study found that,from a macro level,the Chinese building materials in building materials industry in the global status of combined,will lead the development of world building materials industry,exchange merger optimize the business structure of Chinese building materials,and with the influence of the China building materials building materials industry in our country,also will promote the adjustment of industrial structure in China’s building materials industry.From the micro level,the convertible merger has produced a synergistic effect,with significant effect of cost reduction and efficiency increase.The market reaction of convertible merger is good,which improves the stock price of the company,further enhances the value of the enterprise and creates wealth for shareholders.Through the research,the inspiration of this paper is: for the enterprises who want to exchange shares for merger,in order to ensure the success of exchange shares for merger,exchange shares for merger should grasp the opportunity;For China building materials,information disclosure mechanism should be further improved;Regarding the external environment,the related legislation and the supervisory mechanism which exchange shares merges must strengthen.