The Motivation And Performance Analysis Of Cross-border Of Stock For Stock Merger And Acquisition

Cross-border share swap means that the actual controller of a domestic enterprise establishes a special purpose company(SPV)in the offshore center,then uses the equity of SPV as a means of payment to acquire the assets of the domestic enterprise.The complexity of the cross-border share swap process makes it still in the groping experiment stage.The M&A is gradually evolved from the earliest stage where assets and the counterparty are abroad to only one is abroad.The case realized a real cross-border share swap arrangement,that is,domestic listed companies issued shares to overseas counterparties to purchase overseas assets.This case not only achieved breakthroughs in the cross-border exchange-traded field,but also provided innovative M&A payment ideas for companies that acquired overseas assets in an environment where the government strictly tightened foreign exchange.This paper first reviews the classification,advantages and disadvantages of mainstream M&A payment methods,it also joins the mergers and acquisitions examples of BOE to support the theory.After that,the case was taken as the research object.Based on the basic conditions of companies,the detailed merger process was descripted.From the macro level and the micro level,combining M&A and stock exchange as an entry point to demonstrate the necessity of cross-border share-based payment.The cash effect is studied by analyzing the changes in the cash retention and structure after the cross-border share swap,and the financial performance is studied by using the main business profit rate and cash flow liability ratio related to profitability,asset liquidity and long-term development capacity.Finally,it is concluded that from the cash flow dimension,although the increase in net cash flow of enterprises after cross-border share swap does not meet expectations,it curbed the trend of further deterioration of cash flow and repaired the structure of cash flow statement;secondly cross-border share swap can bring about an increase in profitability,but due to the increase in net assets,the return on net assets will not be significantly improved in the long run;thirdly,from the evaluation of asset liquidity,the financial expenses have been reduced in the short term,thus eased the short-term debt repayment pressure and expanded the security boundary,but it did not increase the long-term solvency of the enterprise.Fourthly,from the evaluation of the long-term development ability,the merger and acquisition increased the internalsavings of the enterprise,and the development capacity increased.The development capability continues to improve.