2014: The tide of mergers and acquisitions will inevitably

Editor's Note: The heat wave of the M&A and restructuring market of listed companies in 2013 has blown the door to the M&A market in 2014. According to the latest data from the China Securities Regulatory Commission, in the first month of 2014, the CSRC received 25 applications for mergers and acquisitions from 15 companies, and accepted 21 applications for mergers and acquisitions from 16 companies. This means that under the warm wind of the policy, the M&A market in 2014 will continue to be popular in 2013. Due to the impact of mergers and acquisitions, relevant listed companies, industries and capital markets will receive more attention. However, under the wave of mergers and acquisitions, we still need to be alert to the drawbacks that come with it. Follow-up and insider trading should be highly valued.

M&A and restructuring help increase industry concentration

Successful mergers and acquisitions will enable the original scale of the company to expand instantly, enhance the overall strength, and promote enterprise expansion.

At present, for listed companies in China, the more active the mergers and acquisitions of listed companies, the more active the market will be. In 2013, the regulatory authorities did a lot of work in encouraging and supporting the mergers and acquisitions of listed companies. Industry experts believe that the successive introduction of relevant support policies in the past year has already made the activity of listed companies' mergers and acquisitions appear to be on the rise. The gradual implementation of relevant measures will also enable listed companies to usher in better development opportunities. By improving the enthusiasm and motivation of listed companies' mergers and acquisitions, they can also promote the development of listed companies while promoting the value of listed companies.

From the perspective of industrial distribution, according to the latest information on the basic information and review schedule for the application for merger and acquisition of listed companies in the latest issue of the CSRC, in January, the relevant listed companies in the M&A and reorganization applications received by the CSRC were mainly Distributed in the pharmaceutical, real estate, energy and minerals, automotive, Internet and other industries.

In this regard, China Investment Advisory Director Guo Fanli said in an interview with the "Securities Daily" reporter that at present, the companies completed in January are mainly distributed in the pharmaceutical, real estate, energy and minerals, automotive, Internet and other industries. The merger and reorganization of the industry will help to improve the concentration of the industry to a certain extent, concentrate the resources of the industry, improve the efficiency of resource utilization, and at the same time help avoid disorderly competition. For example, the current overcapacity in the steel and chemical industries is serious. Mergers and acquisitions can alleviate the current situation and eliminate backward production capacity.

For the future, there will be industries that will become the key industry sectors for mergers and acquisitions. Guo Fanli said that from the current Ministry of Industry and Information Technology, the National Development and Reform Commission, the State-owned Assets Supervision and Administration Commission and other ministries and commissions, the nine major industry mergers and acquisitions related programs, including automobiles, steel, Enterprises in the cement, shipbuilding, electrolytic aluminum, rare earth, electronic information, pharmaceutical, agricultural and other industries will have more probability and quantity of mergers and acquisitions in the future. From the actual situation, due to the different entry and exit barriers of various industries, the difference in the size of the country's promotion and the degree of development of the industry itself, the current mergers and acquisitions are mainly concentrated in the fields of medicine and real estate.

Guo Fanli further analyzed that the mergers and acquisitions of the nine major industries promoted by various departments of the country are mostly based on the current status of the industry. The disadvantages of the whole industry are obvious. For example, overcapacity is very prominent, resulting in waste of resources, increased competition, and even the whole. Loss in the industry. Under the impetus of national policy promotion and the industry's own adjustment, the atmosphere of mergers and acquisitions in these industries is very obvious, and there are some big moves.

At the same time, according to the statistics of the private equity of Zero2IPO Group, in January 2014, the Chinese M&A market completed a total of 109 M&A transactions, of which 97 were disclosed, and the total transaction amount was approximately US$7.564 billion, with an average of The case fund size was approximately $779.825 million.

In terms of the number of industries disclosed, the cases of M&A completed in January 2014 were mainly distributed in real estate, energy and minerals, automotive, electronic and optoelectronic equipment, construction/engineering, telecommunications and value-added services, Internet, biotechnology/medical health, More than 20 first-tier industries such as finance, chemical raw materials and processing. From the number of M&A cases, real estate, energy and minerals, and automobiles were ranked in the top three, with 20, 12, and 8 cases respectively; accounting for 18.3%, 11.0%, and 7.3%, respectively; the cumulative proportion was 36.6%.

From the average amount of M&A cases, the financial industry has the highest amount, and there are 5 M&A transactions with an average amount of US$480 million. The second place is the chemical raw materials and processing industry, and the disclosure amount has 5 M&A transactions. The transaction averaged $175 million each; the third place was the real estate industry, where 20 transactions were disclosed and the average transaction size was $132 million.

“Merger mergers and acquisitions through the merger of two or more companies, the formation of new companies or mutual participation, has certain positive significance for enterprises and the capital market.” Guo Fanli stressed that the success of mergers and acquisitions will make the original scale of the enterprise expand instantly, the overall strength Enhance, promote enterprise expansion, and easy to get capital favor; M&A and restructuring need a lot of money, will attract investors' attention, thus revitalizing social funds and improving capital utilization rate; through mergers and acquisitions to achieve the purchase of shells will have more impact on the capital market Obviously, it will also attract more attention from social capital.

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