| As a common way of asset restructuring,Stock-for-Stock M&A refers to the M&A mode in which the target company is terminated or becomes a subsidiary of the M&A company by changing the target company’s shares into the company’s shares according to a certain proportion.Its essence is the embodiment of the principle of freedom of contract and the principle of free transfer of equity in commercial law in the economic market.Stock-for-Stock M&A has its own particularity.It is different from asset M&A and other payment M&A,and has positive value and significance.It provides a new means of M&A for Listed Companies in China,which can avoid huge cash expenditure and other financial expenses.It is a low-cost way of expansion,which is bound to contribute to large-scale M&A of enterprises.It can further improve the governance structure of listed companies;it is conducive to the development of industrial integration and scale economy;it can solve the problem of equity division to a certain extent.It is precisely because the Stock-for-Stock M&A has the advantages that cash M&A does not have that large-scale financing restructuring among companies becomes possible,so it is widely used in the capital market.From the perspective of the development process of East-West M&A,M&A will exist for a long time in China’s capital market and occupy an important position in the future.However,M&A is a commercial activity involving many contents and complicated operation,which may involve many companies,securities companies,investment banks,evaluation firms,accounting firms,law firms,financial companies,even government departments,tax authorities and a large number of subjects on both sides of the M&A.it needs a series of complicated and meticulous capital market operation to succeed.Therefore,in different stages and aspects,M&A may touch different legal issues.It can be said that M&A is a comprehensive reflection of a variety of legal relations.For example,the signing of merger and acquisition agreement and the agreement of terms will involve the relevant issues of the contract law;the elimination or change of the company’s subject qualification,the maintenance of the company’s creditors’ interests,the protection of shareholders’ legitimate rights and interests,etc.will involve the relevant issues of the company law;the issue of securities,the disclosure of information,the transaction of the securities market,etc.will involve the issues of the securities law;whether the company has any impact on the market competition after the merger will also involve anti-monopoly law issues;other issues such as the choice of accounting methods,tax treatment will also involve other legal issues.This paper focuses on the analysis of the problems existing in the legal system of M&A,such as the procedure of M&A,share repurchase,private placement,shareholder subrogation litigation,dissenting shareholder repurchase and relief system,so as to improve the legal system of M&A in China,especially the protection system of the rights of small and medium-sized shareholders.In addition to the introduction and conclusion,the article is divided into six chapters.The first chapter mainly expounds the connotation,legal attributes and types of stock exchange M&A,and analyzes the particularity of the legal issues of stock exchange M&A,the principles to be followed in solving the legal issues of stock exchange M&A.The connotation of stock exchange M&A can be defined as the M&A mode in which the target company is terminated or becomes a subsidiary of the M&A company by changing the equity of the target company into the equity of the company according to a certain proportion.This paper explains the characteristics of stock exchange M&A from five aspects: the change of ownership structure,tax preference in disguise,relieving capital pressure,breaking through the limitation of M&A scale and complicated procedures.This paper discusses the legal attributes of Stock-for-Stock Merge and Stock-for-Stock Acquisition through the analysis of the differences between Stock-for-Stock Merge and Stock-for-Stock Acquisition and sorts out the types from four aspects: Stock-for-Stock Consolidation by Merger and Stock-for-Stock Acquisition;Stock-for-Stock M&A for capital increase,treasury Stock-for-Stock M&A,cross Stock-for-Stock M&A of parent-subsidiary companies,Stock-for-Stock M&A between listed companies and non-listed companies,demonstrates the theoretical basis of the legal system of Stock-for-Stock M&A from the four theories of scale economy theory,synergy effect theory,tax shield effect theory and information theory,and demonstrates the understanding from the three dimensions of Stock-for-Stock M&A and efficiency,share exchange and fairness,and fairness and efficiency.It is the principle to solve the legal problems of Stock-for-Stock M&A.The second chapter makes a comparative study of Chinese and foreign legislation on Stock-for-Stock M&A.First of all,this paper explains the legislative mode and system of Stock-for-Stock M&A in China,and discusses the specific legal system of Stock-for-Stock M&A in China from five aspects: the provisions of the company’s investment mode,the provisions of listed company’s M&A mode,the provisions of M &A subject,the scope of application of Stock-for-Stock M&A,and the information disclosure of Stock-for-Stock M&A.In the world,the United States is the first country to regulate M&A activities,which is more mature in the following aspects: the price of Stock-for-Stock,the ratio of Stock-for-Stock,share repurchase,private placement,duty of good faith for controlling shareholders,relief of dissenting shareholders and special legal system;Japan is more mature in the definition of Stock-for-Stock subject,terms of Stock-for-Stock M&A,approval procedure of Stock-for-Stock agreement,relief of dissenting shareholders,the litigation of Stock-for-Stock M&A,reservation right for new shares.In Britain,there are detailed system designs on the registration and information disclosure of Stock-for-Stock,and the estoppel of Stock-for-Stock M&A.It provides enlightenment and reference for our country to improve the legislative level,combine the substantive law with the procedural law to enhance the legislative systematization,improve the operability of the legal rules of Stock-for-Stock M&A,pay attention to the protection of the rights and interests of small and medium shareholders through the investigation of the legislation of M&A.The third chapter deals with the legal issues of Stock-for-Stock M&A procedure.Laws and regulations do not fully provide for the contents of Stock-for-Stock M&A plan and agreement.There are deficiencies and loopholes in the resolution system of shareholders on the company’s Stock-for-Stock M&A,and the lack of operability in the provisions of directors’ and controlling shareholders’ duty of good faith in the company’s Stock-for-Stock M&A are the deficiencies in China’s Stock-for-Stock M&A procedure system.This part takes the problem as the guidance,combs the basic procedures such as the conclusion of the Stock-for-Stock merger agreement,the deliberation and approval of the Stock-for-Stock agreement,and the information disclosure of the Stock-for-Stock merger.Combined with the case of Nanshan holding’s stock Stock-for-Stock merger and absorption of Shenzhen Base,this part makes an empirical analysis,and analyzes the goal orientation of the Stock-for-Stock M&A process,the "Trinity" balance mechanism and other highlights in combination with the determination of the Stock-for-Stock scheme,the Stock-for-Stock price and the Stock-for-Stock ratio.This paper comprehensively combs and investigates the legal issues of the Stock-for-Stock M&A procedure system in China,and provides the corresponding ideas from five aspects: the basic procedures of Stock-for-Stock M&A should be strict and detailed,the basic contents of Stock-for-Stock M&A scheme and agreement should be improved,the Stock-for-Stock system suitable for China’s actual situation should be constructed,the procedural provisions of Stock-for-Stock payment should be increased,and the simple procedures of Stock-for-Stock M&A should be set up.The fourth chapter discusses the legal issues of the ratio of stock exchange in M&A.The determination of stock exchange ratio is the core legal issue in Stock-for-Stock M&A.The purpose of this part is to ensure the authenticity,accuracy and integrity of the share exchange ratio,balance the rights and interests of shareholders of both sides of the merger and acquisition.This paper explains three methods to determine the share conversion ratio,including earnings per share method,net assets per share method and market price per share method.Each method has its own advantages and disadvantages.The law should not interfere too much in the determination of the share exchange ratio.It is more affected by the development of the capital market.After all,the essence of the determination method of the Stock-for-Stock ratio is based on the market value.This paper analyzes the issues and countermeasures in the determination of the Stock-for-Stock ratio,and focuses on the shortcomings and improvement of the current determination method of the Stock-for-Stock ratio,the loss and complement of the determination mechanism of the Stock-for-Stock ratio.The fifth chapter discusses the cash option of Stock-for-Stock M&A.As an original and gradually developed institutional arrangement in the practice of M & A in China’s capital market,cash option is mostly used in the case of Stock-for-Stock M&A.Although the regulations such as the administrative measures for the acquisition of listed companies have been adjusted,the application of the cash option system has exposed legal issues such as the diversification of pricing standards,the lack of third-party performance mechanism and regulatory arbitrage risks.This part analyzes the legal relation of cash option from three aspects: the M&A company and the target company,the shareholders’ exercise of rights,the third-party company and the acquisition company.Combining with the arbitrage risk of cash option,the pricing limitation of cash option,the deviation between the exercise conditions of cash option and the system value,and the lack of the third-party performance mechanism,this paper proposes to clarify and expand the scope of application of cash option,establish the conditions for the exercise of the right of temper justice with mercy,merge the right of cash option and the voting of company resolution,establish a sound and fair pricing mechanism of cash option,perfect sound and stable mechanism of third-party performance,perfect sound mechanism of information disclosure for price.The sixth chapter discusses the legal protection of minority shareholders.Compared with cash M&A,it is particularly important to protect the interests of minority shareholders in Stock-for-Stock M&A,which is based on the principal-agent theory,the principle of capital majority,the principle of equality of shareholders,the theory of relationship contract.There are also practical demands to protect minority shareholders in Stock-for-Stock M&A.This part analyzes the dilemma in protection of minority shareholders in Stock-for-Stock M&A,from the perspective of shareholder representative litigation in Stock-for-Stock M&A,then,this paper puts forward some suggestions,such as information disclosure mechanism to protect the right to know of minority shareholders;strengthening the integrity obligations of controlling shareholders;making clear the cash option,Stock-for-Stock ratio and Stock-for-Stock price;improving the system of dissenting shareholders’ share repurchase request right;improving the category voting;improving the system of double shareholder representative litigation. |
