China Merchants Highway Exchange And Absorption Consolidation North China High Speed Case Study

This article takes the case of China Merchants Highway Conversion and Absorption and Consolidation of North China Expressway as the research case,and analyzes the key issues such as the ratio of share swaps and cash options in the share swap-merger plan to explore whether the design of this share swap and merger plan is reasonable and whether it balances multi-party interests related party risks and benefits.The research process can serve as a reference for the healthy use of the stock exchange merger in the capital market in the future,and promote the future development of the share swap merger in China.This article’s research case:On December 4,2017,the North China Expressway,a leading company in the area of North China’s regional expressways for 18 years,ushered in the last trading day.With the “Come on the curtain” of North China Expressway,China Merchants Highway Network Technology Holdings Co.,Ltd.ushered in a “freshman”.The merger and acquisition of China Merchants Highway and the merger of the North China Expressway caused a huge wave in the highway industry.The two major road giants were combined.In the listing announcement of China Merchants Highway,according to the exchange rate,the opening price is expected to be 12.68 yuan.There was hot discussion in the market.Some people are optimistic about this merger,and think that after the listing of China Merchants Highway,the stock price will rise.Others have expressed that they are not optimistic.It is believed that the opening price of China Merchants Highway is expected to be too high.On December 25,2017,China Merchants Highway opened at 11.04 yuan,and there was no expected uptrend on the first day of opening.Instead,the stock price fell slightly.That is to say,for the original shareholders of North China Expressway,the choice of exchange shares suffered losses.Therefore,for the merger of China Merchants Highway and the absorption of the merger with the North China High Speed Transaction,investors have disputed the design of the merger plan.The ratio of shares to be converted is the core of the share swap and merger plan.It is necessary to balance the risk and balance of multi-stakeholders when it is determined,which is the key to successful mergers and acquisitions.As a mechanism established for the purpose of protecting the interests of small and medium shareholders,the cash option is a mechanism that can really protect the minority shareholders and remains to be analyzed.In the process of the study,firstly,this paper introduces the background and significance of this thesis,and expounds the relevant theories and literature review.Second,it briefly introduces the background of M&A parties,describes the M&A plan in detail,and briefly describes the causes of mergers and acquisitions.Then,from the perspective of the merger and acquisition,the reasons for the exchange of shares are analyzed,and from the basis of determining the ratio of conversion,the rationality of the price of the initial issue of shares of the combining party and the conversion price are analyzed,and then the cash options of the transaction are analyzed.This study found that,first,the merger of shares can solve the problem of financing and payment of the payer in the business combination.Second,the fair value of the ratio of exchanges can be guaranteed only if the two parties need a reasonable valuation.Third,if the cash option is unreasonable,it cannot effectively protect the interests of minority shareholders.Finally,the relevant proposals for the rational application of share swap and merger in our country are proposed.