Research On The Factors Affecting The Choice Of Enterprise M&A Payment Methods

In recent years,with the rapid development of the market economy,competition among various industries has intensified.In order to enhance their core competitiveness and realize long-term benefits,more and more enterprises have begun to implement strategic mergers and acquisitions.For enterprises,whether the M&A activities can be carried out smoothly is closely related to the correctness of the choice of payment methods.China's M&A history is relatively short,mostly using cash as a payment instrument.Foreign relatively mature theories and rich payment instruments are not fully applicable in China.Therefore,it is necessary to study the M&A payment methods suitable for the development of Chinese enterprises.In 2013,Dongcheng Pharmaceutical formulated a development strategy of “paying attention to both bulk drug and preparation business,endogenous growth and extension of progress”,and under the guidance of the strategy,nine mergers and acquisitions occurred,including five cash payments.1,1 equity payment and 3 mixed payments.This paper takes the continuous merger and acquisition activities of Dongcheng Pharmaceutical as the research object,and comprehensively analyzes and compares the influencing factors related to the choice of M&A payment methods,and draws corresponding conclusions.As the development strategy of the enterprise will affect the choice of payment methods,it will also have an effect on other influencing factors,which will affect the payment method of M&A.Therefore,this paper analyzes the development strategy of the enterprise,and Dongcheng Pharmaceutical will be affected by various factors such as strategic objectives,control rights,cash holdings and financing capabilities when making payment options.By comparing these influencing factors,it is found that the strategic objectives,cash holdings,transaction size,control rights and whether the mergers and acquisitions are related play a key role in the choice of M&A payment methods.Therefore,when enterprises are engaged in integrated M&A expansion,they should take the development strategy as the cornerstone,pay attention to the role of these five influencing factors,and flexibly adopt multiple payment methods to promote the smooth progress of M&A activities.