Research On The Private Enterprises' Overall Listing By Share Exchange Merger

Since the official launch of the share-trading reform in April 2005,the capital market has gradually entered the era of full circulation.A large number of companies hoped to raise funds through listing,strengthen the company's strength and enhance their brand influence.The previously split-listed state-owned enterprises accelerated the pace of securitization of its own assets.There were more and more state-owned enterprises listed on the market;at the same time,private enterprises were quietly exerting their efforts.In 2006,the State-owned Assets Supervision and Administration Commission(SASAC)proposed to intensify efforts to further promote the restructuring and listing of local enterprises,and fully support the overall listing of enterprises whose all assets or main business assets were excellent.In the same year,Xinhu Zhongbao completed its overall listing by directional add-issuance and became the first privately listed company.In 2013,Midea Group exchanged its shareholdings to absorb Midea Electric and achieved the overall listing.It is the first privately-owned enterprise to achieve overall listing by “share swap merger”.At present,the “share swap merger” model to achieve overall listing gradually gains the more and more attention and application of companies.What is the motivation for the overall listing by“share swap merger”?What's its influence on the company's performance and how it affects,etc?It is worth thinking about and exploring these questions.To this end,this paper studies on the overall listing by “share swap merger” and its effect.This paper analyzes the different models of the overall listing,the factors affecting the choosing of overall listing models,the impact of overall listing on the company's performance,etc.It is found that the overall listing can integrate the industrial chain between the listed company and the group company,internalize and reduce the related party transactions.At the same time,the “share swap merger” model under the same control can strengthen the control of the controlling shareholder.So the controlling shareholder has the ability and power to supervise the management's behavior,thereby reducing the agency cost after the overall listing.What's more,the controlling shareholder will have a stronger selfmotivation to improve the performance of listed companies and it's less likely to tunnel.It is expected that the performance of the company will be improved after the overall listing.In addition,because the exchange of shares involves the integration of the resources of the two companies,and the efficiency of resource utilization will affect the performance of the company,if the company wants to maintain long-term improvement results,it must focus on the integration of resources after the merger to ensure the synergistic effect of the overall listing.On the basis of this theory,combined with the case of WENS share swap to absorb Dahuanong to achieve overall listing,there are three motivations for its overall listing: optimizing resource allocation,and exerting synergies;standardizing internal corporate governance,and effectively reducing related party transactions;consolidating capital base,and enhance financing capabilities.Then,the paper further analyzes that there are five motivations for WENS's choice of “share swap merger”model:alleviating capital pressure,obtaining listing qualification,protecting the interests of target company shareholders,optimizing the company's capital structure,and enjoying tax incentives.Then,the paper analyzes the short-term market performance,long-term market performance and financial performance.The results shows that WENS's overall listing by “share swap merger”model has a positive short-term market effect,and the performance improvement is more significant in the year of and the first year after the overall listing.What's more,the overall listing by “share swap merger”model has improved short-term and long-term solvency and profitability,and has a positive impact on short-term operational capability and growth capacity,but the long-term effect is not obvious.If long-term stability is to be maintained,the company must pay sufficient attention to the resource integration work of both parties.The enlightenment of this paper is: First,enterprises must always pay attention to the relevant policies of the state,and under the guidance of national policies,carry out strategic deployment in line with their own development;secondly,enterprises should choose the appropriate overall listing model according to their own circumstances and exert the synergistic effect of the overall listing to obtain rapid growth opportunities;finally,after the overall listing by the “share swap merger”,it is important to focus on the effective integration of resources,and then gain the scale advantages and the synergistic effect to improve company performance.