A Case Study On Cross-border M&A Between China Tianying And Huayu Fund

In recent years,the country has paid more and more attention to environmental protection.After 2012,the state has successively issued a series of policies to support the development of China’s environmental protection industry.As the first of the seven emerging strategic industries,the environmental protection industry has also ushered in greater development opportunities.In 2021,our government work report proposed to do a solid job of carbon peaking and carbon neutrality in various national tasks,and the development of China’s environmental protection industry has reached a new level.With the continuous development of China’s economy,the state has increased its support for the environmental protection industry,and environmental protection enterprises have also ushered in new opportunities for development.Mergers and acquisitions,as an important way for environmental protection enterprises to achieve leapfrog development,can rapidly expand their strength and generate synergies in a short period of time,thereby enhancing their competitiveness.At this stage,the mergers and acquisitions of private environmental protection enterprises in our country are often faced with financing constraints,which hinder the implementation of corporate mergers and acquisitions strategies.In this context,listed companies jointly set up industrial M&A funds by cooperating with PE institutions,and the financing pressure of the company has been greatly eased by introducing multi-party strategic investors.At the same time,M&A funds can also carry out target screening,fund-raising and subsequent acquisition management around the strategic objectives of listed companies,and participate in the early,medium and later stages of M&A,improve the efficiency of M&A and reduce the relevant risks involved in the process of M&A.Since its inception in 2011,the “listed company+PE” M&A fund model has been widely used in the market with its unique advantages and has become a good choice for listed companies to implement M&A strategies.Under the background of the key support of national policies and the gradual deepening of the marketization of the environmental protection industry at this stage,China Tianying,a private environmental protection enterprise in China,has successfully acquired the European environmental protection enterprise Urbaser through joint PE Huayu Fund,realizing the leap-forward development of the enterprise.Therefore,this paper selects the cross-border merger and acquisition event of China Tianying,an environmental protection enterprise,and comprehensively uses the case analysis method,the event research method and the financial indicator method to conduct a specific study on this merger.First of all,this paper summarizes the relevant domestic and foreign literature on cross-border M&A and M&A funds,and defines and summarizes related concepts and theories to form a basic understanding of this M&A.Secondly,it introduces the specific content of this M&A,covering the macro environment and industry background of this M&A,the main transaction entities—the acquirer China Tianying,the PE institution Huayu Fund and the acquiree Urbaser,the motives of this M&A and China Tianying the specific transaction process of the implementation of mergers and acquisitions.Finally,a case analysis is carried out,which includes four parts: first,the operation of Huayu M&A Fund in this cross-border M&A;second,the role of Huayu M&A Fund in mergers and acquisitions;third,market performance and financial performance;fourth,the risks and problems existing in China Tianying’s use of M&A funds.Through the above analysis,a comprehensive and in-depth understanding of the acquisition was obtained.Through the above analysis,this paper draws a total of five conclusions: first,China Tianying,as an environmental protection enterprise,has achieved the goal of enterprise M&A to a certain extent through M&A and expanded the comprehensive strength of the enterprise;second,Private enterprise China Tianying’s cross-border M&A financing method is reasonable and in line with its own reality.The establishment of industrial M&A fund has greatly expanded the financing channels and alleviated the financing pressure;third,in the post-merger enterprise performance research,the short-term performance of China Tianying is improving,but the long-term performance needs to be improved.Among them,the profitability and solvency of the company will be affected,and there will be goodwill impairment and business transformation pressure,which needs to be paid attention to;fourth,the “listed company +PE” M&A fund plays an important role in the process of cross-border mergers and acquisitions of enterprises and has significant advantages.In the process of transaction,the company gave full play to its professional advantages in organizational structure design,financing mode selection and other aspects,and assisted the smooth development of M&A;fifth,there are risks related to cross-border mergers and acquisitions by listed companies using merger and acquisition funds,which need to be focused on and guarded against.On the basis of research and analysis,this paper draws the following enlightenment:first,environmental protection enterprises should actively follow the trend of the times,use mergers and acquisitions to achieve rapid development of enterprises and enhance their comprehensive competitiveness;second,enterprise mergers and acquisitions should choose appropriate financing methods according to their own conditions,expand financing channels,and use reasonable methods to improve financing ability;third,after mergers and acquisitions,enterprises should always pay attention to their own business conditions,pay attention to the changes in financial indicators,adjust business development direction in a timely manner,and avoid the adverse effects of mergers and acquisitions on enterprises;fourth,listed companies should try to use “listed company+PE” M&A funds according to their own conditions,give full play to the professional advantages of M&A funds,and promote the smooth completion of M&A in the whole process;fifth,enterprises should pay attention to the risks of agency and information disclosure arising from the application of M&A funds,regulate their own behavior,and strengthen supervision and management at the regulatory level to promote mergers and acquisitions funds are back to basics.Focusing on the environmental protection industry,this paper enriches the research perspective of the “listed company+PE” model and supplements the existing literature research perspective by studying the successful cross-border M&A case of China Tianying and Huayu fund.It is hoped that through this research,it will provide some reference experience for listed companies in the environmental protection industry to carry out cross-border mergers and acquisitions by means of industrial M&A funds,and also provide reference for environmental protection companies to achieve their own long-term development through M&A,so as to promote the healthy development of environmental protection companies in China.