Research On Conflicts Of Interests Between Majority And Minority Shareholders In Enterprise M&A Under The Control Of Insiders

M&A has always been a popular focus in the capital market.Under the background of increasing M&A activities and private placement as payment methods,the conflicts of interest between major shareholders and minority shareholders are prominent.At the same time,the development of joint-stock companies triggered principal-agent contradictions and further formed an insider control structure.In addition to the traditional contradictions of principal-agent,insiders can become the target of private placement.Besides,there is disagreement between the insider and minority shareholders in certain decisions,so conflicts in interest between this two parties are also prevalent.This paper studies the case of the failure of Gree Electric to acquire Zhuhai Yinglong,in order to conclude conflicts of interest among each side and give suggestions for corporate governance.First of all,this paper defines the interest groups in the case by describing the formation of the internal control structure of Gree Electric,which is represented by insiders and major shareholders to fight against minority shareholders.Then,this paper analyzes the main conflicts of interest in the merger and acquisition plan as disagreement on fixed pricing and M&A pricing.Regarding the M&A pricing problem of this case,the further analysis of this paper shows that on the one hand,compared with the net asset quality of Gree Electric Appliances,the M&A pricing is too high;on the other hand,compared with the industry at that time and after the market reaction analysis,the M&A pricing tends to be reasonable.Then,this article embarks on the interests of insiders and minority shareholders,and finds that the dispute over M&A pricing is caused by the difference between the long-term appeal of insiders and the short-term appeal of minority shareholders.The fundamental reason is that the corporate governance mechanism and governance structure are not perfect.Finally,the paper puts forward relevant suggestions on the above analysis results.