Analysis On The Reduction Of Major Shareholders In Corporate Mergers And Acquisitions

With the development of China’s market economy,the market competition is increasingly fierce,survival of the fittest cruel let enterprises try every means to enhance their own strength in order to remain invincible.Merger and acquisition,as an effective and rapid means to enhance the strength of enterprises,is increasingly favored by enterprises.According to the statistics of zero2 ipo,the number of m&a transactions in China increased from 317 to 3298 in 2010-2017,which increased by 10.4 times in 7 years.The transaction amount involved increased from 231.841 billion yuan to 1917.253 billion yuan,an increase of 8.26 times.After the reform of non-tradable shares in 2005,the market gradually entered the full circulation period.But with the lifting of the ban gradually listed,major shareholders frequently reduce the holdings.Some illegal reduction of the phenomenon also began to appear.Some of these illegal operations benefited greatly and damaged the stable and healthy development of the whole market.Intelligent as China’s reform and opening up of China has been one of the largest Internet companies,has a large number of engaged in merger and acquisition activity,since listings of mergers and acquisitions part of the enterprise is the need of the development of company in order to layout,but also bought some has nothing to do with the company’s business enterprise,a large number of mergers and acquisitions led to the company pressure increases year by year,and part of the merger and acquisition of enterprise performance is not ideal,finally had to choose to sell part of mergers and acquisitions of companies to reduce the pressure on the company’s financial,corporate debt pressure and sold at the heart of the m&a company led to the company’s prospects,large shareholders’ holdings and corporate information disclosure violations,etc.,The company’s stock price fell sharply,causing a violation of the rights and interests of minority shareholders.This kind of continuous large number of mergers and acquisitions of companies and then the performance decline led to the substantial reduction of shareholders is typical,which has certain research and reference significance.The main contents of the case are as follows:The first part is the case introduction,which mainly introduces the industry overview,enterprise introduction,details of the merger and acquisition of dahua intelligent from 2013 to 2015,details of the reduction of major shareholders and the dimission of senior executives.The case analysis part is divided into merger and acquisition analysis and reduction analysis,of which the merger and acquisition analysis part is followed by case analysis.The case introduction part includes three parts.The first part is the motivation of the merger.The second part is m&a performance analysis,which starts from three aspects,namely financial performance analysis,market performance analysis and non-financial performance analysis.Among them,financial performance analysis USES the financial index method,from the company’s profitability,operating ability,debt paying ability and growth ability of four aspects;Market performance analysis adopts event study method and non-financial performance analysis.The ability analysis of the reduction mainly includes five aspects: one is the motivation of the reduction;the other is the motivation of the equity acquirer to acquire the smart equity of dawa;the third is the market reaction after the reduction;the fourth is the economic consequences after the reduction of the major shareholders;the fifth is the impact of the reduction of the major shareholders on the rights and interests of small and mediumsized shareholders.The last chapter is the enlightenment of the case.Based on the results of the above analysis,this chapter summarizes the three inspirations brought by this case: enterprises should not blindly acquire investment gains through mergers and acquisitions;regulators should strictly supervise the irregularities in mergers and acquisitions and reduction of stock holdings;small and medium-sized investors should also actively safeguard their own rights and interests.