Research On Motivation Of M&A Based On Essential Capital Theory

As our national Market economy gets mature, the number of enterprises, whichtake part in the M&A, the scale of the merger and involved area expand continuously.But the value creation ability of the M&A counterpart is not perfect. As an importantstrategic activity, the motivation of the M&A often reflects the characteristics offinancial strategy of enterprises. The motivation of the M&A, which has been studiedgenerally in western and our documents, has a variety of types, and the relative theoryof which more depends on the western perfect right market and capital system. Thearticle will study the characteristic and motivation of the M&A of local enterprisesand the relationship between the financial strategy in view of essential capital theory,by the analysis on176M&A cases between2001and2011of Shandong province, sothat it can support the decision of M&A.The thesis is divided into six parts. The first chapter, which introduced theessential capital theory into the research of the motivation of the M&A, established ananalysis way of the motivation of the M&A based on the essential capital structureand function, and established analysis tools at the same time. The second chaptermade a commentary on the related documents about the motivation of the M&A,Resource-based View and essential capital theory. The third chapter made a statementof the characteristics of the cases came up with an opinion simultaneously. The fourthchapter made a classified analysis of the motivation of the M&A. Based on the casesabove with the specific analysis tool, so that it can find out the characteristics of thesubstantive capital structure behind the motivation of the M&A. On the basis of thecollection and research on the analysis results of the fourth chapter, the fifth chaptermade clear the inner relationship of business life cycle, essential capital structure and the characteristics of the motivation of the M&A, so that it can lay the foundation forthe conclusion. The sixth chapter drew a conclusion by the preceding analysis results.The motivation of the M&A, which is from the sharing and redistribution ofcomplementary resource and ability between the M&A counterpart and the target one,is closely related to the business financial strategy. If it can be explained with businessessential capital theory, that is to say, the motivation of the results from theanticipation of the new value which is created by the essential capital structureoptimization from the M&A counterpart (maybe the target one) after the M&A. Ifthere exists significant structural imbalance and complementarity in the essentialcapital optimization of the essential capital structure by respective development, the essentialcapital structure of the both sides will be tried to be reconfigured by the M&A in orderto accomplish and keep their competitive advantages. The substance that enterprisestake part in the M&A is to make the compact with the target one that the essentialcapital is reconfigured between the both sides of the M&A. With the reconfiguringprocess of the essential capital of the both sides, it will make the better efficiency ofthe essential capital to implement functions of the value creating. The text alsoillustrated the functions and configuration feathers of each kind of essential capitalduring each kind of The M&A activities.The first innovation spot of this paper is to make innovations and improvements foranalysis tools of traditional RBV in view of essential capital theory. In this way, itprovides more scientific and effective analysis tools for the discovery of therelationship between the motivation of the M&A and the financial strategy.The second one is to make a standardized analysis of the classical cases of theM&A of Shandong province in the past decade, and do research from the localviewpoint. The conclusion can be used for our national M&A activities.