Study On The Schematic Design Difficulty Of Convertible Merger

Mergers and Acquisitions is one of the important means for enterprises to expand their scale and transform their mode of operation in the capital market today.It is crucial for enterprises to upgrade their industry status and adjust their industrial structure.In the process of economic globalization,the scale and mode of Mergers and Acquisitions of enterprises are characterized by diversification.Among them,Convertible Merger as an emerging Merger and Acquisition method can prevent enterprises from paying huge amounts of cash in a short period.Therefore,low-cost strategic expansion can be completed without being restrained by financial strength and fund-raising ability.In addition,after the completion of Convertible Merger,the acquired firm can retain the relevant shareholders' equity in the merged enterprise and share the future capital increase income of the merged enterprise.At the same time,stock payment as a way of Mergers and Acquisitions also has the advantage of reasonable tax avoidance.Therefore,in the context of economic restructuring,Convertible Merger has been highly respected by companies from both sides.However,the process of Convertible Merger is extremely complicated.The choice of the stock exchange scheme involves multiple interests.A slight inadvertent link may lead to the Convertible Merger failure.In the context of today's Corporate Restructuring,the issue of the selection of the exchange target,the determination of the exchange ratio,and the setting of cash option are the difficulties in the process of Mergers and Acquisitions.Therefore,studying on the schematic design of the Convertible Merger,and Summarizing its successful experience and shortcomings of the Convertible Merger are useful as reference for other enterprises.Based on the case study method,the paper selects the demonstration effect case of Merchants Expressway Holdings CO.,LTD.Convertible Merger with Huabei Expressway CO.,LTD.First of all,it sorts out the relevant theories of mergers,and the related literatures of mergers and acquisitions way and Convertible Merger.On this basis,the paper analyzes the difficulties in the implementation of the merger through the exchange target selection,the exchange ratio determination and the cash option setting.Then,it analyzes the implementation process of the case enterprise and the performance after the merger,and finds out the rationality of the schematic design of the convertible merger.Finally,it sums up the successful experience of Merchants Expressway Convertible merger with the Huabei Expressway,and provides some reference basis for other rail transit construction enterprises that are ready to implement the Convertible Merger.