The Xugong Foreign Mergers And Acquisitions Case Study

Nowadays the study on the legal issues of foreign mergers and acquisitions (M&A) has become more and more heated. With the development of china economy and economic globalization, Chinese and foreign capital exchanges frequently .Foreign capital invests in China massively by way of M&A. Their purposes are not only for the Economic scale and market share, but also mainly for the global economy of competition pattern and strategy system in the 21st century so as to reorganize the division of global economy. Therefore,What should we do when foreign capital invests in china by means of M&A? What kinds of methods can be used to decrease their adverse effects? In order to provide useful contributions, this thesis researches on foreign M&A laws based on the study of the case of American Carlyle Group acquisition of Xu Zhou construction Machinery Group co., Ltd. (XCMG).At very beginning, author gives us a brief introduction to the development of foreign M&A in china and explains the significance of this essay. Besides, the thesis comes from seven components, which goes like following;The first part primarily looks back on the whole process of the mergercase and sums up five disputes------national economic security review system,monopoly, states property trading system, foreign private equity funds, Anti-merger measures.On account of above analyses, the following five parts make a study in detail by means of law, economics and management science.The second part analyzes the National Economic Security Review System. The author illustrates the relationships of foreign M&A and National Economic , and then introduces its current situation in china and compares them with similar rules in American law system .Finally, author points out the defects of china's current review system.The third part researches in the monopoly caused by foreign M&A. The author compares the different delimitations on monopolize acts and links its with the antitrust review procedure in the case ,and concludes that the current review system is usually uncertainty for foreign investors.The fourth part mainly discusses the trading system of State-owned property rights and loss of state assets. Author analyzes the current property trading law, statute and administrative system. Especially, the author combines them with the case, and indicates that this trading case hasn't effective supervision by relevant government agencies and the whole process of merger is an opaque process of transaction.The fifth part researches in the properties of foreign Private Equity (PE) funds and discusses the mode of operations. The author analyze the effects of foreign PE in the merger by ways of illustrating its nature .Furthermore, the author gives us a whole pattern of regulatory system in other county especially in American and concludes that the PE in this merger, in fact, is benefit for the long-term development of XCMG.The sixth part mainly discusses the effective of anti-merger measures——"the Poison pill clause" in the case. The chapter mainly discourses the features of poison pill program and legal status in china and other countries. And it clearly points out that the anti-merger measures haven't legal status in the law of china .Therefore ,at the end of the chapter, it arrives at a conclusionthat the anti-merger measure------"the poison pill clause", eventually, can notprevent the future hostility merger.The seventh part puts forward some useful advices on perfecting the presenting law of M&A in china. In this part, the author uses empirical analysis method to analyze the presenting law of merger and to focus on the mature regular rule of other countries. Then he considers that the foreign M&A law should based on the current law so as to complete the implementation rules. At first, for foreign investments, we should formulate a Foreign Investment Law to unify the current laws, clearly.Second, based on the "antimonopoly law" , we may adopt a pattern of M&A law system which concludes the Antimonopoly Law ,Acts and the Regulations.Hence , we can supervise the process of merger strictly . Third, we should authorize the implementing agencies to legislate Regulations and M&A Guidance. Finally, we should perfect two related review agencies by authorize higher executive power and construct the review agencies with professionals.