What is agreement holding?

Agreement holding: refers to the M&A behavior that M&A company obtains all or part of the property rights of the target company according to the transfer price of the equity agreement, so as to obtain the control rights of the target company. The object of equity transfer generally refers to state shares and legal person shares. Equity transfer can be the transfer of equity from a listed company to a non-listed company or from a non-listed company to a listed company.

The object of this model is clear and easy to transfer, and it has obvious advantages in feasibility, operability and economy.

The advantages of this method are:

1) China's current laws stipulate that when the shareholding ratio of an institution reaches 30% of the issued shares, it shall issue an offer. Because the CSRC encourages this acquisition method and exempts it from the obligation of compulsory acquisition, it can easily hold more than 30% of the shares of listed companies without undertaking the obligation of comprehensive acquisition, which greatly reduces the acquisition cost.

2) At present, the domestic share price is different, and the share price of state-owned shares and legal person shares is lower than the circulating market price, which makes the cost of M&A lower; The acquisition of non-circulating public shares by agreement can not only achieve the purpose of mergers and acquisitions, but also obtain the "price rent" brought about by it.