Research On The Choice Of Payment Methods And Economic Consequences In Enterprise Mergers And Acquisitions

With the rapid development of China’s capital market,the activities of enterprises expanding their strength and forming economies of scale through mergers and acquisitions are becoming increasingly frequent.At the same time,thanks to the increasingly perfect laws and regulations on the capital market in China,companies can adopt more diverse payment methods when merging and acquiring other companies,from simple cash and stock payments to asset payments,bond payments,and many other more efficient methods More flexible payment methods.Adopting different payment methods in M&A projects will bring different economic consequences to the enterprise.Therefore,choosing a payment method that is suitable for the current situation and future development trend of the enterprise during M&A can provide inexhaustible motivation for the integration work and subsequent development after the merger.Based on this,this article selects a merger and acquisition case of Zhongke Electric’s acquisition of Xingcheng Graphite through a hybrid payment method in 2017.Despite declining performance and shrinking asset size,Zhongke Electric hopes to achieve transformation and development through the acquisition of Xingcheng Graphite.Therefore,in the merger and acquisition,a merger and acquisition payment method mainly based on stock payment and supplemented by cash payment is adopted,By analyzing the payment method and its economic consequences,it is determined whether the payment method has achieved the merger and acquisition goal of Zhongke Electric.At the same time,we hope to provide reference for the selection of payment methods for mergers and acquisitions of other companies in the capital market through case studies.In the theory of mergers and acquisitions,there are different financial and non-financial indicators that focus on measuring economic consequences,and there are many types of indicators.In order to make research more focused on the impact of payment method selection in mergers and acquisitions,it is necessary to select economic consequence indicators that are more relevant to payment methods from numerous indicators.In the case of Zhongke Electric’s acquisition of Xingcheng Graphite,the payment method of Zhongke Electric mainly relies on stock based payment,supplemented by cash payment,which will affect the shareholding ratio,cash holdings,business capacity,etc.of the company’s controlling shareholders.By analyzing the changes in financial statements before and after the acquisition of Zhongke Electric and the characteristics of the payment method,this article selects control rights,debt repayment ability Measure the impact of the payment method adopted on the economic consequences of the enterprise using four indicators of short-term market performance and operational performance,and analyze whether the payment method is conducive to the company’s acquisition goals.Based on the research in this article,relevant conclusions are drawn and suggestions are put forward:when enterprises hope to achieve cross industry development through mergers and acquisitions,the payment method they choose should not only be in line with the current development situation of the enterprise,but also need to determine the financial needs of the enterprise based on the development stage of the new industry;At the same time,enterprises should increase their interest correlation with the original management of the acquired company;In addition,when selecting payment methods,enterprises should also consider the shareholding situation of their controlling shareholders to avoid their control rights being threatened.