The Monopoly Tendency Of M & A By The Foreign Capital In China And The Financial Strategies

With the upgrade of market opening level in China, the foreign capital has been permeated into every industry in China. In generally, it starts from joint investment. Through the joint investment, the foreigners can find out the situation home, get into the laws and rules in order to lower the difficulty in entering the China market. With the confirmation of the economy internally, the market rules getting close to the international and the continuous maturity of the laws and rules, the foreign capital gets in all sorts of ways, using the property right market, stock market controlling the stock right for commanding the operating right.The influx of foreign capital into China by Merger and Acquisition has been an important trend concerning Foreign Direct Investment in China, which inevitably affects our economy in various ways.On the one hand, it has a lot of advantages such as boosting the capital accumulation, advancing technology and management. On the other hand, it also causes monopoly which brings about the irregular economy and influences the normal growing.Pursuing the high profit, capturing the enormous market, taking advantage of domestic operating system and achieving monopoly have become the chief reasons for Merger and Acquisition. The unclear of the anti-monopoly law, contending for brand between the twos, the long different strategy, existed and the divergence of the concepts will be the challenge in this process. Combining the present situation, our government should not only create a fine economy circumstance, but also give them the positive guide, optimalizing the structures in China, in order to promote the continued development in our country.The first chapter proposes that the foreign capital change the form from joint ventures and cooperation with the evolution to the acquisition, holding various industries leading enterprises constitute the main question of a monopoly. Literature reviews the foreign and home theories, including the common theory of M&A, international direct investment theory, Cross-border M&A consisted of the research in motivation and effect. The second chapter discusses the main theoretical basis for cross-border mergers and acquisitions, including mergers and acquisitions from the economic theory, management theory and Finance, M & M Theory. Also analyze the reasons why the foreign capital watch on us, for the first reason, we have a huge population which means huge market, then the rich resources with the comparatively using environment, and why we pull them in. The third chapter uncovers the foreign M & A in the exposed monopolistic tendencies like Danone, P & G, Unilever, Johnson & Johnson, L' and so on. Some of them lead well-known trademarks to crisis in China like Maxam, Robust and so on. The last chapter introduce the procedures of the M&A, including selecting the target enterprise, signing the letter of intent, surveying the financial statement and the law affairs, negotiations, getting the approval and integration. finally raises about the financial aspects of holding equity strategy, how to estimate the value of the enterprise and intangibles.The conclusion indicates, the foreign capital have not threaten in essence, but it, should be gave the high concern by the government. In the premise of enlarging opening, we should take proper standard and protecting policy, give lead and management for the danger that the foreign capital may bring to us.