Case Study Of Woer And Changyuan Group M&A And Anti-M&A

Starting from the "Baoyan Storm" in 1993,with the lifting of the acquisition and anti-acquisition policies in 2002 and the split-share structure reform in 2005,more and more Mergers and Acquisitions(M&A)and anti-Mergers and Acquisitions(Anti-M&A)cases emerge in China's capital market.Although Western countries have had a lot of theoretical research and practical experience after many big waves of mergers and acquisitions,due to differences between their economic system,political system and legal system,the experiences cannot be directly applied to China.So far,there are still few studies on the detailed analysis of the M&A and anti-merger cases in China.This article takes the equity competition between Woer and Changyuan Group as the case study object,hoping to provide experience for Chinese companies in how to acquisitions and anti-mergers.This paper adopts the mean of case study to analyze the motives of the merger and anti-merger sides,the strategic choices of both parties and the impact of equity Positions on both parties.In order to obtain the high-quality resources of the industry leader Changyuan Group and achieve synergy,the acquisition of Woer initiated hostile mergers and acquisitions on the occasion of two largest shareholders of Changyuan Group reducing their shareholdings.The Woer mainly adopts the M&A strategy such as the Trust Plan,Asset Management Plan,equity pledge repurchase and the conclusion of concerted action,which's comprehensive strength is far less than that of the Changyuan Group,aiming at achieving the M&A plan.In order to avoid changes in control rights and prevent related business risks,Changyuan Group management quickly responded by adopting some anti-merger strategies,such as targeted additional shares issuance,"White Knight",and amending the articles of association,and resolutely resisting the hostile mergers and acquisitions of Woer.In the end,the two sides resolved the dispute over the control by means of reconciliation.Woer took advantage of the equity concession to obtain the development advantage in the heat-shrinking industry.Although the sale of the subsidiary Changyuan Electronics has not had much impact on the overall business layout of the Changyuan Group,many mergers and acquisitions in the anti-merger process have brought a lot of negative impacts to the Changyuan Group.In addition,it is found that the market is opposed to the hostile mergers and acquisitions of Woer,and it has a positive response to the anti-Mergers and acquisitions activities of the management of Changyuan Group.For this case of control contention,this paper believes that there are lots of experience in the selection of the timing of the merger and the way of capital organization,anti-merger strategy selection and equity dispute resolution.In addition,the acquirer should actively expand the financing channels and formulate a feasible M&A plan;the anti-merger should establish a comprehensive anti-merger mechanism in advance,in the event and afterwards;the market regulator should strengthen supervision and provide necessary support for mediation related disputes.