1. Cash payment. Cash payment means that the acquirer purchases the assets or shares of the target enterprise by paying a certain amount of cash.
Yes, so as to realize the payment method of M&A transaction.
Second, stock payment.
Stock payment means that the acquirer directly uses the stock as a payment tool in exchange for the stock of the target company.
Three. Asset payment Asset payment means that the acquirer takes non-cash assets as the payment consideration in exchange for the shares of the target enterprise.
Or the payment method of assets.
Fourth, mixed payment. Mixed payment refers to cash, non-cash assets, stocks, warrants and convertible certificates.
Securities, corporate bonds and other mixed methods are used as payment consideration to implement the merger and acquisition of the target company.
Cash acquisition refers to the acquisition company paying a certain amount of cash in order to obtain the ownership of the target company. Once the shareholders of the target enterprise receive the cash payment for their shares, they lose any rights and interests in the original enterprise. In practice, the cash sources of the acquirer mainly include self-owned funds, issuing bonds, bank loans and selling assets, which can be divided into immediate payment and deferred payment according to payment methods. The advantages of cash acquisition are obvious.
Share exchange M&A means that M&A company pays its shares to the shareholders of the target company in exchange for a certain proportion of the shares of the target company, and the target company terminates or becomes a subsidiary of the acquiring company. It can be said that this is a method to optimize resource allocation without using a lot of cash. Share-for-share mergers and acquisitions are widely used in the world, which are divided into three forms: capital increase for shares, share exchange for shares and share repurchase for shares.
In many cases, both parties to the merger and acquisition will involve delaying the payment of part or all of the price. This is a payment method that is beneficial to the acquirer when the seller is eager to get rid of a company because of its poor profit, which is similar to the usual "installment payment method".
To sum up, M&A payment methods have their own advantages and disadvantages. The purpose of enterprise M&A should be to obtain the best M&A benefit, and choose the payment method reasonably according to the characteristics of the enterprise and its market position, so as to design the best M&A payment scheme.