What is M A and what are the ways of M A

Enterprise mergers and acquisitions, that is, mergers and acquisitions between enterprises, are the acts of enterprise legal persons acquiring the property rights of other legal persons in a certain economic way on the basis of equality, voluntariness, and equivalent compensation, and are a major form of capital operation and operation of enterprises. M&A mainly includes three forms: company merger, asset acquisition, and equity acquisition. A corporate merger refers to a legal act whereby two or more companies jointly form a company by entering into a merger agreement in accordance with the conditions and procedures stipulated in the Company Law.

The merger of a company can be divided into two forms: merger by absorption and merger by new establishment. Asset acquisition refers to the selective acquisition of all or part of the assets of the other company by an enterprise in cash, in kind, valuable**, labor services or debt forgiveness. Equity acquisition refers to the acquisition of all or part of the equity of the shareholders of the target company.

As a result of a controlling takeover, Company A holds sufficient shares to control the absolute majority of other companies, which does not affect the continued existence of Company B, and its organizational form remains unchanged, and it still has an independent legal personality in law. Legal basis: Article 172 of the Company Law of the People's Republic of China provides that a merger of a company may be a merger by absorption or a new merger.

The absorption of another company by one company is a merger by absorption, and the absorbed company is dissolved. The merger of two or more companies to create a new company is a new merger, and the parties to the merger are dissolved.

Restructuring and mergers and acquisitions refer to the acquisition, division, merger and replacement activities of enterprises' equity, assets and liabilities based on business strategy considerations, which are manifested in asset and debt restructuring, mergers and acquisitions, bankruptcy and liquidation, equity or property rights transfer, assets or creditor's rights, enterprise restructuring and shareholding system transformation, management and employee stock ownership or equity incentives, debt-to-equity swap and equity-to-debt swap, capital structure and governance structure adjustment, etc.

The main ways of mergers and acquisitions are:

1.Acquisition of assets for cash.

2.Acquisition of equity for cash.

3.Acquisition of assets with equity.

4.Acquisition of equity by equity.

5.Acquisition of assets with assets.

M&A is when one company acquires control of another company. The condition for a merger and acquisition is that the two companies must be established in accordance with the law and should be carried out in accordance with legal procedures. The ways of mergers and acquisitions are:

1. Acquire assets in cash. 2. Acquisition of equity in cash. 3. Acquisition of assets with equity.

4. Acquisition of equity with equity. 5. Acquire assets with assets. Article 172 of the Company Law provides that a merger of a company may take the form of a merger by absorption or a merger by a new establishment.

A company absorbs other companies for the merger of absorption, and the absorbed company is dissolved. The merger of two or more companies to establish a new company is a new merger, and the parties to the merger are dissolved. Article 173 In the case of a merger, the parties to the merger shall sign a merger agreement and prepare a balance sheet and a list of assets.

The company shall notify creditors within 10 days from the date of making the merger resolution and make an announcement in a newspaper within 30 days. Within 30 days from the date of receipt of the notice, and within 45 days from the date of the announcement if the creditor does not receive the notice, the creditor may request the company to pay off the debts or provide corresponding guarantees.

The methods of mergers and acquisitions include: acquisition of assets, asset replacement, ** assets, leased or managed assets, donated assets, and restructuring of corporate liabilities to achieve asset restructuring.

1. M&A and restructuring risks:

1. Payment risk.

The usual payment instruments for mergers and acquisitions include company cash, bonds, bank loans, etc., which involve a huge amount of funds and have great financing risks. If the acquirer chooses a cash payment instrument, it will lead to a large reduction in the company's cash flow, and the company will have to bear huge cash pressure. From the point of view of the acquiree, the cash method will not be welcomed due to the inability to postpone the capital gains realized by the capital gains and transfers, so that they cannot enjoy tax incentives, and they will not be able to own the shareholders' equity of the new company, which will affect the chances of success of the merger and bring related risks.

2. Operational risks.

Operational risk refers to the fact that after the completion of the merger, the acquirer is unable to generate operational synergies, financial synergies, market share effects, economies of scale and experience sharing and complementarity for the entire enterprise group, and even the entire enterprise group is dragged down by the performance of the new company that has been acquired and merged.

3. Information wind.

Narrow pass. The premise of M&A is that the target company has a considerable understanding of the target company, and the information of the two parties to the M&A is completely symmetrical. However, this is only an ideal state, and in actual mergers and acquisitions, there are many cases where hasty actions fail.

4. Anti-takeover risk.

Under normal circumstances, the acquired company is unwelcoming and uncooperative towards the takeover, and there are various "poison pills" that they use to kill the acquirer. These anti-takeover actions undoubtedly pose considerable risks to the acquirer.

5. Institutional risk.

The institutional risks are mainly reflected in: 1. The lack of talents for mergers and acquisitions of enterprises and the scale and quality of mergers and acquisitions are seriously restricted. 2. The large-scale approach to mergers and acquisitions of enterprises according to administrative means brings certain risks to enterprises.

3. The personnel placement of the acquired enterprise consumes capital and resources due to the requirements of the system and policy, and often puts a heavy burden on the acquirer.

6. Legal risks.

For example, China's current acquisition rules, requiring the acquirer to hold 5% of a listed company must be announced and suspended (for listed companies non-promoters), after each 2% increase to repeat the process (will be announced 14 times), holding 30% of the shares is required to issue a comprehensive takeover offer, this set of procedures caused by the acquisition cost of the high, the acquisition risk of the large, the degree of complexity of the acquisition, make the acquisition almost impossible, enough to discourage the acquirer, the reverse takeover is correspondingly easier.