Research On Optimization Design Of M&A Payment Method Selection

The development process of China's A-share listed companies' mergers and acquisitions can be roughly divided into three stages.Before 2016,for the merger and acquisition of the 1.0 era,the M&A market was booming,the number of M&A transactions was in a blowout situation,and the amount of M&A transactions reached record highs,2015 was even called “the first year of mergers and acquisitions”;after 2016,for the merger and acquisition of the 2.0 era,the regulatory policies tightened,and the mergers and acquisitions market suffered a cold winter,the number of mergers and acquisitions plummeted,and the amount of M&A transactions shrank sharply.Since the second half of 2018,for the merger and acquisition of the 3.0 era,favorable policies have been introduced intensively,the review process has been accelerated,and the heat of corporate mergers and acquisitions boosted.The M&A market is presenting new trends,exposing new trends,and ushering in new hopes.How to select the appropriate M&A payment method to better cope with various challenges is an important consideration for M&A transactions,and it is also a real problem that needs to be solved.First of all,this paper takes the major asset reorganization of listed companies in Shanghai and Shenzhen stock markets from 2014 to 2018 as a sample,and studies the current situation of China's M&A transactions and M&A payment methods.It is found that horizontal integration is still the mainstream,most of them are large and mediumsized M&A of over 1 billion,industry concentration has declined.At the same time,for the convenience of research,this paper defines mixed payment as the payment method of “cash + stock”.At present,China's M&A payment method is single and primary,cash payments dominates.When the transaction size is small,cash payment is favored.And the ratio of mixed payment and stock payment is gradually rising as the scale of the transaction continues to expand.Second,as the core of the full paper,this paper attempts to establish a selection model of M&A payment method including cost,financial status and control rights--Specifically in terms of cost of model design,introducing game theory,constructing a game payment matrix,and measuring the respective costs of both parties;In terms of the financial status of the model design,establishing a two-dimensional Cartesian coordinate system,dividing the type of financial status and designing the combination of financial status type and M&A payment method;In terms of control rights of model design,setting three major control rights dilution indicators to prevent the control risk from falling.Finally,taking the Bangbao Puzzle acquisition of Mei Qilin as an example to apply the M&A payment method selection model.Introducing the basic profile and trading background of both parties to the merger,analysing of its merger and acquisition motivation,explaining the entire M&A transaction implementation process,comparing the cost of different M&A payment methods,matching financial status with M&A payment methods,studing changes in control rights before and after payment,turning its original cash payment into stock payment.Thereby,making a useful exploration for the optimization design of M&A payment methods.