Case Study Of CICC's Merger And Acquisition Of CIC Securities

In 2014,the State Council promulgated the Nine Articles of the New Country.The promulgation of the Nine Articles of the New Country is mainly aimed at accelerating the construction of my country's capital market,improving the institutional mechanism of the capital market,and promoting the development of my country's securities industry.At present,my country's securities firms have problems such as small scale,poor concentration,and obvious trend of business homogeneity,and are facing competitive pressure from mature foreign investment banks.To solve these problems,the most effective way is to carry out mergers and acquisitions integration.This article selects the case of CICC's merger and acquisition of CIC Securities for research.CICC's merger and acquisition of CIC Securities occurred at the time when China's securities industry opened to the outside world in 2017.It was the largest merger and acquisition case in the securities industry at the beginning of opening,and it had a strong representative.This article uses a case study method to conduct a comprehensive analysis of this merger and acquisition case.First,starting from the motivation of mergers and acquisitions,conduct research on the motivation from both inside and outside.Then analyze the payment methods and transaction risks in the process of M&A transactions.CICC has adopted the method of paying consideration shares to absorb and merge CIC Securities.After the merger,Central Huijin Investment Ltd.became the controlling shareholder of CICC,while small and medium shareholders may face the risk of uncompensated equity dilution.Then the performance of M&A is studied from the three aspects of short-term wealth effect,financial performance and non-financial performance after M&A.Financial performance analysis mainly uses the financial index method for research.The indicators of the solvency,profitability and growth ability of CICC before and after M&A were selected for longitudinal comparison,and then the performance of CICC before and after M&A in the overall industry was selected for analysis to draw conclusions about financial performance.The non-financial performance is studied from three aspects: wealth management business,market share and business synergy.Finally,this article draws some inspiration from the process of CICC's merger,acquisition and integration of CIC securities.By studying the case of CICC's merger and acquisition of CIC Securities,it can provide some useful reference for the mergerand acquisition integration of other securities companies in my country under the wave of industry internationalization.Through research,it is found that the main reason for CICC's acquisition of CIC Securities is that it faces increasingly fierce competition in the domestic and foreign markets.With the solid customer base of CIC Securities,it accelerates the deployment of wealth management business,complements its business advantages,and strengthens its own Competitiveness.In the year when CICC completed its M&A in2017,the asset scale doubled,and the overall scale of operating income rose 6 places in the industry to 11 th place,and its market share increased rapidly.The net profit growth rate in the year of the merger was as high as 52%,and it still maintained a relatively rapid growth after the merger.In 2019,CIC Securities changed its name to CICC Fortune,and CICC took the first step in its wealth management business.However,during the integration process,the internal structure of CIC Securities has changed greatly,and the staff turnover has been more serious,which has also brought a brief painful period of integration for CICC.