A Study Of Selling State Shares Through Merger & Acquisition

The sale of state-held shares is very important for enriching social security fund, state-owned capital's quitting competitive industry, and building up corporate governance structure.Because of the complexity of balancing the profit of different type of shareholders, the trading problem of non-trading shares can't be solved in short period of time. The state holdings can't be sold in the stock trading market. But the sale of state-held shares is urgent, so selling state holdings through merger and acquisition is a possible method.To find the amount of sold state holdings and the feasibility of selling state holding through merger and acquisition, we analyze the merger and acquisition from 1997 to 2002 according the number of the merger and acquisition, the number of shares have been sold and the amount of the capital which have been sold.The price is the main part of the merger and acquisition, so we analyze the pricing method in the merger and acquisition and the relation between sell price and the market price and the relationship between sell price and the net asset of the company. Then we find the intrinsic value of the company through growing perpetuity model of the corporate valuation theory. By comparing the sell price and the company's intrinsic value, we try to find the right price of the merger and acquisition, which is fair to both the state and the buyer. We also analyze the infection of the property of the seller and the buyer and the transfer method to the selling price.At the end of the article, we give some suggestions about the sale of the state holding through merger and acquisition.