So, why can mergers and acquisitions be absorbed by issuing stocks? This is mainly achieved through the operation of the capital market. In the process of absorbing the merged enterprise, the enterprise usually issues new shares as a means of payment to purchase the equity or assets of the merged enterprise. This operation can be understood as a way of "exchanging shares for shares", that is, issuing new shares in exchange for the equity or assets of the merged enterprise.
For example, suppose that Company A is a large-scale enterprise and wants to acquire Company B to expand its business scale. A company can issue new shares as a means of payment, and exchange the newly issued shares for the equity of B company ... In this process, A company obtains the funds needed to acquire B company by issuing new shares, and the shareholders of B company become the shareholders of A company after the acquisition is completed, thus realizing the merger between enterprises.
This way of absorbing merged enterprises by issuing stocks can not only expand the scale of enterprises and enhance their competitiveness, but also enable shareholders to enjoy the benefits brought by the growth of enterprises by holding newly issued stocks. At the same time, this method can also avoid excessive cash expenditure and reduce the financial risk of enterprises.
It should be noted that the issuance of shares to absorb merged enterprises needs to meet the requirements of relevant laws and regulations, such as the company law and securities law of various countries. In this operation, enterprises need to fully consider the market environment, enterprise strategy, financial situation and other factors to ensure the smooth progress of mergers and acquisitions and achieve the expected goals.