Chinese Steel Industry, Mergers And Acquisitions Path Study

The study start in the background that international ore price hike in a row in the past five years while China who rank first as steel producer all over the world has nothing to do with it. The article aim at analyze issues encountered by Chinese steel industries during M&A through industrial economy theory, pointing out what kind of social and economical condition should China steel industry establish to facilitate M&A, at the same time putting up the realistic path to push forward M&A in Chinese steel industry in current time.This article has four chapters altogether. In first chapter, the author conclude typical M&A model in the world after interpreting general M&A theory, and briefly introduced the documentation on Chinese steel industry M&A.In chapter two the author did empirical study on Chinese steel industry by using concentration ratio, and at the same time the author analyze the reason that lead to the fallacious layout of Chinese steel industry. By using industry economic SCP model, the author analyze relationship among market structure, market behavior and market performance in Chinese steel industry, pointing out that Chinese industry can't but upgrade it's concentration ratio by M&A. This article conclude four main M&A model in Chinese steel industry., pointing out that government not enterprise dominate M&A in Chinese steel industry and it's difficult to push forward M&A between two district and shortness of exterior environment which is needy while M&A.In chapter three the author conclude that general adoption of the market principle coupled with perfect law and financial environment are the fundamental factors for high efficient M&A. Hence to build perfect social and economic condition will be the precondition for M&A in Chinese steel industry.In fourth chapter the author identify the concept of perfect social and economical condition which include sound market mechanism, perfect law environment, agency service as well as social security system. After analyzing M&A situation in Chinese steel industry, the author conclude that ambiguous M&A main body and lack of law, financial market, agency service as well as social security system is the main reason that hinder the progress in Chinese steel industry. In the last part of the article, the author try to put up a suggestion that an alliance with stock cross-holdings, as an transitional way to target is the right way to current social and economical condition in the M&A in Chinese steel industry because of its special characteristics.