Research On The Choice Of Payment In L Corp.&S Co,Ltd. Merger And Acquisition Case

European and American are going in weak economic growth, and the growth of China’s economy is going down. Domestic enterprises face downward pressure on profits. But crisis breeds opportunity. It is time that the industry enterprises optimize industrial structure, accelerate industry integration. The state has promulgated policies that promote the transformation of the economic growth mode. Under the government’s encouragement policies, domestic M&A market has realized repaid development.M&A is an important way to achieve rapid expansion, improve market share. We should pay more and more attention on the decision of M&A payment, which is an important part to determine the success or failure in merger. There are many M&A theory and empirical analysis in global and domestic. China’s security market is marked with late start and rapid growth, and there are relatively few studies on the M&A payment method in domestic small business.Our country has many regulations on listed corporation’s M&A. It is very important issues to research, that, under the policy, the listed corporation how to select the appropriate payment, to reduce the acquisition cost, to improve the performance of mergers and acquisitions.On the basis of merger theory, this research constructs the framework of M&A payment determination. Based on the analyses of the L&S’s merger and acquisition case, this research try to find that domestic listing Corporation how to select the optimal payment under the constraint of existing laws and regulations.Based on their basic situation and business development situation of L Company and S Company, this article analyses the existing problems in their development, and put forward the necessity of the merger.As small and medium-sized enterprises, L Company has the characteristics, such as small scale, single operation, and weak risk resistibility. In recent years, due to the raw material price fluctuation and the appreciation of the RMB factors, L company’s profit is going downward. But the underlying reason is L company’s incomplete industrial structure, and market structure. Based on the good prospects of industry future and the company’s own situation, the company decided to implement the strategic merger, in order to optimize the industrial structure, enhance the ability to resist risks and core competitiveness.S company is located in the L company upstream industries. Although it has good development prospects of the industry, and has a certain scale and profit basis, but it’s upstream raw materials industry has supply bottlenecks. And its capacity utilization rate is low, so the profit space is limited, and because of its high asset-liability ratio, financing capability is weak. S company need to solve financial problem. By this acquisition, S company, who become subsidiary of L company, can use abundant financial instruments, to eliminate the industry development bottleneck.When mergers and acquisitions program has been basically confirmed, the choice and determination of M&A payment method become the most concerned focus and difficulty in the negotiations.This research applies the M&A payment mode choice model in the L&S merger and acquisition payment scheme. On account of the basic situation of both sides and general principles, this M&A case realize the organic unity of the optimal payment with the relevant domestic regulations, through comprehensive comparative analysis of the advantages and disadvantages of the stock and cash payment, by using the innovative forms of transactions,M&A with raising assorted funds...