| China securities market, from small to large, has gone through 20 years. The development of securities market contributes much on China's socialist economic construction. We can see it from the total market value of the securities market, the number of listed companies and securitization rate. We used a short time to achieve the development which western developed countries used several hundred years. So the development not only brought us with prosperity, but also many issues remain unresolved. Therefore, China securities market has appeared several concentrated waves of merger and reorganization. As one of the principal part of securities market, securities companies are facing the battle of life or death. We found that there were some problems in China securities market in 1990s. Major problems were such as unclear location of securities company, imperfect monitoring mechanism and inadequacy of laws and regulations.When the market bulls, some companies tend to engage in illegal business or invest in high-risk products to seek high yield. When the market bears, the companies probably expose irregularities and high-risk investment. It will even trigger liquidity crisis or insolvency. Finally, the companies are directly faced with the danger of being mergered. Of course, in addition to their own problems, the laws published by government have become an important reason for securities industry merger and reorganization. These laws are such as'separation of banks and securities' in the mid-90's,'separation of trust and securities' in initial 21st century, comprehensive management of securities companies between 2004 and 2007,'participate one and control one'in 2009 and so on. The issues of China securities companies M & A are considered on two perspective——government-led mode and market-oriented mode in this paper. Then discussed the factors of China securities companies M & A and relative modes, and comparatively analyzed the performance of modes, this paper hopes to illustrate the more reasonable mode concerning the China securities companies M & A,when considered China's national conditions and the explanatory power on theory. Next, we study the factors which influence securities companies M & A with the principal component analysis and the questionnaire survey. From the study we find the macro factors, such as changes in national economic policy and regulatory policy changes, remarkably influence merger and reorganization of China securities companies. At the same time, the change of market conditions affects M & A also,but securities companies'own brand, development strategies and other factors have not obvious influence. The third chapter has a detailed discussion.Based on the above conclusions, we further discuss the modes of merger and reorganization, which are government-lead mode and market-oriented mode. In the chapter IV, we mainly use models to analyze three different types of government-lead M & A detailedly. Through the analysis of the crisis relief model, we find that imposing; punitive refinance rate is the sword of Damocles in the model.In addition, we also analyze specific issues arising in the M & A of securities companies and present some: suggestions for improvement. In the market-oriented part of the fifth chapter, we use game theory analysis to study manager actions, government actions, and shareholder actions. From the dynamic game point, we observe the mechanism of market-oriented M & A. If we use the ratio of earnings per share with opportunity cost to measure the interest's game between shareholders, it can more effectively reflect the impact of cost factors in the market-lead M & A. At the same time, we put forward some proposals on market-oriented M & A problems.In addition, we use specific cases to analyze the two modes of M & A. We sum up four paths to achieve government-lead mode from the practice, which are takeover by government administration, central bank refinancing, injection of central investment companies and restructuring by securities investor protection fund. From the practice of market-oriented mode, we also sum up four ways, which are overall acquisition, part of the business acquisitions, new mergers and merger by absorption.After the introduction of government-lead mode and market-oriented mode, it is necessary to use data to analyze differences between the two modes. Therefore, in the sixth chapter, we mainly use financial analysis to compare solvency, operational capabilities, profitability and so on. From the study, we find that the government-lead M & A is more effective in the short term while the market-oriented M & A is better in the long term. This is consistent with part cases of the government-lead M & A because of the short-sighted behavior of government. Because of small samples and difficulty of collecting financial data, we cannot exclude the limitations of conclusion of the study.Finally, we give the relevant policy recommendations basing on the whole study and obtain the following conclusions:firstly, M & A of China securities companies has significantly particular motivations;secondly, government should give selective assistance to the dangerous corporations under certain conditions; thirdly, market-lead mode is the inevitable trend in future;and lastly, M & A is the only choice for China securities companies. If the idea, methodology, conclusions or recommendations of this research will inspire securities industry practitioners, securities regulators, or related research staffs, it would be a great honor to the author.
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