Merger and acquisition of enterprises is an extremely complicated operation process, involving many economic, legal and policy issues, and the operation procedures of merger and acquisition of different enterprises are not the same. Therefore, China's relevant laws and regulations have made relevant provisions on the procedures of enterprise merger and acquisition, so as to standardize the merger and acquisition behavior, reduce the risk of merger and acquisition and improve the efficiency of merger and acquisition.
(A) the general process of enterprise mergers and acquisitions
1. Make a strategic plan for M&A. To carry out M&A activities, an enterprise must first make clear the motivation and purpose of M&A, and make a strategic plan for M&A in combination with the development strategy of the enterprise and its own actual situation. Relevant departments of enterprises should provide M&A objectives for decision makers through detailed information collection and investigation according to M&A's strategic planning.
2. Select the merge target. Enterprises should conduct a comprehensive and detailed investigation and analysis of the objects that can be merged, and choose the appropriate objects according to the motives and purposes of mergers and acquisitions.
3. Make a merger plan. In order to fully understand all aspects of M&A objectives and minimize and avoid M&A risks, M&A shall conduct preliminary due diligence. The content of due diligence includes the qualification of the target, the approval or authorization of this merger, the ownership structure and shareholder's capital contribution, various property rights, various debt documents, litigation, arbitration and administrative punishment, and the existing personnel of the target enterprise. On the basis of due diligence, the enterprise shall formulate a merger plan and make arrangements for the merger mode, transaction mode, financing means and payment mode.
4. Submit the M&A report. After the target of M&A is determined, both parties shall prepare their own M&A reports and report them to the competent authorities for corresponding examination and approval procedures. Major M&A activities or mergers and acquisitions of state-owned enterprises shall be examined and approved by state-owned assets supervision and administration departments at all levels; The merger of collective enterprises shall be approved by the workers' congress; Joint-stock enterprises must be reviewed and approved by the shareholders' meeting or the board of directors. After the approval of the M&A Report, the M&A News shall be published in the local major media, and the creditors, debtors, contract parties and other stakeholders of the merged enterprise shall be notified.
5. Conduct asset appraisal. Asset evaluation is the core link in the process of enterprise merger and acquisition. Through asset evaluation, we can analyze and determine the difference between book value and actual value of assets, as well as the difference between nominal value and actual efficiency of assets, and accurately reflect the change of asset value. At the same time of asset evaluation, it is necessary to conduct a comprehensive inspection of the creditor's rights, debts and various contractual relationships of the merged enterprise to determine the treatment method of debt contracts. On the basis of evaluating the assets of the acquired enterprise, the reserve price of M&A transaction is finally formed.
6. Negotiate and sign the contract. According to the transaction reserve price determined by asset appraisal, the final transaction price is determined through negotiation between the two parties, and the legal representatives of both parties sign a formal merger agreement (or merger contract) to clarify the rights and obligations of both parties in merger and acquisition activities.
7. Handle the transfer of equity (property right). After the signing of the M&A Agreement, both parties of M&A shall go through their own examination and approval procedures and report them to relevant institutions for the record. Involving state-owned assets, it shall be reported to the state-owned assets supervision and administration department for examination and approval. After approval, legal notarization should be done in time to ensure that the merger agreement is legally binding. After the M&A Agreement comes into effect, both parties of M&A shall handle the equity transfer and asset transfer in time, and handle the transfer, cancellation and change procedures with the industrial and commercial departments.
8. Pay the consideration. After the M&A Agreement comes into effect, the acquirer shall deliver the bidding documents in the form of cash, shares and bonds. Pay to the acquired enterprise according to the payment method agreed in the agreement.
9. mergers and acquisitions. Whether M&A activities can achieve real success depends largely on the integrated operation of enterprises after M&A. The main contents of M&A integration include the integration of company development strategy, business operation, management system, organizational structure, human resources and corporate culture.
(B) Special considerations of M&A process of listed companies
In order to regulate the M&A of listed companies and related changes in rights and interests, and protect the legitimate rights and interests of listed companies and investors, China has made relevant regulations on the M&A process of listed companies.
1. Rights disclosure system. The Measures for the Administration of Acquisition of Listed Companies stipulates that when the shares held by the purchaser through securities trading, agreement transfer, administrative transfer or other legal means reach 5% of the issued shares of a listed company, it shall prepare a report on the change of equity within 3 days from the date of this fact, submit a written report to the China Securities Regulatory Commission and the stock exchange, notify the listed company and make an announcement; During the above period, the shares of the listed company shall not be traded again.
After the shares held by the purchaser reach 5% of the issued shares of a listed company, the corresponding report and announcement shall be made for every 5% increase or decrease in the proportion of the shares held by the purchaser in the issued shares of the listed company.
2. State-owned shareholders transfer shares of listed companies. The Interim Measures for the Administration of the Transfer of Shares by State-owned Shareholders of Listed Companies stipulates that the transfer of shares of listed companies by state-owned controlling shareholders through securities trading shall be decided by the state-owned controlling shareholders in accordance with internal decision-making procedures if the following two conditions are met at the same time. Do not meet one of the following two conditions, must be reported to the state-owned assets supervision and administration institution for approval before implementation. (1) For listed companies whose total share capital does not exceed 1 100 million shares, the cumulative proportion of net shares transferred by state-owned controlling shareholders for three consecutive fiscal years has not reached 5% of the total share capital of listed companies; For listed companies with a total share capital of more than 6,543.8 billion shares, the cumulative number of net transferred shares by state-owned controlling shareholders has not reached 50 million shares in three consecutive fiscal years or the cumulative proportion of net transferred shares has not reached 3% of the total share capital of listed companies. (2) The transfer of shares by the state-owned controlling shareholder does not involve the transfer of the controlling interest of the listed company.
If the proportion of accumulated net shares transferred by state-owned shareholders through securities trading in a complete fiscal year does not reach 5% of the total share capital of the listed company, it shall be decided by state-owned shareholders in accordance with internal decision-making procedures and reported to the state-owned assets supervision and administration institution for the record; If it reaches or exceeds 5% of the total share capital of a listed company, the transfer plan shall be submitted to the state-owned assets supervision and administration institution of the State Council for examination and approval before implementation.
Where a state-owned shareholder transfers the shares of a listed company by agreement, it shall, after internal decision-making, report to the state-owned assets supervision and administration institution at or above the provincial level in writing in accordance with the prescribed procedures, and inform the listed company in writing of the information on the agreed transfer of shares, which shall be publicly disclosed by the listed company according to law.
3. State-owned enterprises acquire shares of listed companies. The Interim Provisions on the Administration of Transfer of Shares of Listed Companies by State-owned Units requires that if the cumulative net transfer of shares of listed companies by state-owned enterprises in a fiscal year does not reach 5% of the total share capital of listed companies, the state-owned enterprises shall make a decision in accordance with internal management procedures and report it to the state-owned assets supervision and administration institution at or above the provincial level for the record; If it reaches or exceeds 5% of the total share capital of a listed company, the state-owned enterprise shall report its plan for purchasing shares of the listed company to the state-owned assets supervision and administration institution at or above the provincial level for the record before organizing its implementation.
If the state-owned enterprise does not have the control right of the listed company after accepting the shares of the listed company by agreement, or if the state-owned controlling shareholder of the listed company increases the shares of the listed company by agreement, the state-owned unit shall make a decision in accordance with the internal management procedures; If a state-owned enterprise owns the controlling stake of a listed company after accepting the shares of the listed company by agreement, it shall report to the state-owned assets supervision and administration institution at or above the provincial level for examination and approval after signing a share transfer agreement with the transferor.
4. Financial advisory system. Financial advisers play an important role in the merger and reorganization of enterprises, and play an active role in activating the merger and acquisition market, improving the efficiency of restructuring and safeguarding the rights and interests of investors. According to the relevant laws and regulations of our country, when purchasing a listed company, the purchaser shall employ a professional institution registered in China with the qualification to engage in financial consulting business as a financial consultant; If the state-owned controlling shareholder of a listed company intends to transfer its shares by agreement and loses its controlling stake, or if the state-owned enterprise transfers its shares by agreement and becomes the controlling shareholder of the listed company, it may employ a professional institution registered in China as a financial consultant; When a foreign investor buys a domestic company with equity, the domestic company or its shareholders should invite an intermediary registered in China as a consultant.
Financial advisers should be diligent and conscientious, abide by industry norms and professional ethics, maintain independence, and ensure the authenticity, accuracy and integrity of the documents they produce and issue.
(3) Special considerations for foreign investors to acquire domestic enterprises
1. Basic clauses
Merger and acquisition of domestic enterprises by foreign investors refers to the following situations: foreign investors purchase the equity of domestic non-foreign-invested enterprises (hereinafter referred to as "domestic enterprises") or subscribe for capital increase of domestic non-foreign-invested enterprises, so that domestic enterprises are changed into foreign-invested enterprises (hereinafter referred to as "equity merger and acquisition"); Foreign investors set up foreign-invested enterprises, purchase assets of domestic enterprises through foreign-invested enterprise agreements and operate the assets; Foreign investors agree to purchase the assets of domestic enterprises and use the assets to invest in the establishment of foreign-invested enterprises to operate the assets (hereinafter referred to as "asset merger").
Foreign investors should follow the following basic provisions when acquiring domestic enterprises:
(1) It shall abide by the laws, administrative regulations and rules of our country, follow the principles of fairness, reasonableness, compensation for equal value, honesty and credibility, and shall not cause excessive concentration, exclude or restrict competition, disrupt social and economic order, harm the public interests, or lead to the loss of state-owned assets.
(2) It meets the requirements of China's laws, administrative regulations and rules on investor qualifications and policies on industry, land and environmental protection. Merger and acquisition of industries that foreign investors are not allowed to operate alone in the Catalogue of Industries with Foreign Investment shall not lead to foreign investors holding all the shares of the enterprise; In the industry that needs Chinese holding or relative holding, after the merger of enterprises in this industry, China should still hold a holding or relative holding position in the enterprise; Foreign investors are prohibited from engaging in industries, and foreign investors are not allowed to acquire enterprises engaged in such industries. The business scope of the original investment enterprise of the merged domestic enterprise shall meet the requirements of relevant foreign investment industrial policies; Do not meet the requirements, should be adjusted.
(3) If the merger and acquisition of domestic enterprises by foreign investors involves the transfer of state-owned property rights of enterprises and the management of state-owned shares of listed companies, they shall abide by the relevant provisions on the management of state-owned assets.
(4) When a foreign investor merges a domestic enterprise to establish a foreign-invested enterprise, it shall, after being approved by the examination and approval authority in accordance with the relevant provisions, go through the formalities of alteration or establishment registration with the registration authority.
(5) If the merged enterprise is a domestic listed company, it shall also go through the relevant formalities with the the State Council Securities Regulatory Authority in accordance with the Measures for the Administration of Strategic Investment of Listed Companies by Foreign Investors.
(6) All parties involved in the merger and acquisition of domestic enterprises by foreign investors shall pay taxes in accordance with the provisions of the China tax law and accept the supervision of the tax authorities.
(7) All parties involved in the merger and acquisition of domestic enterprises by foreign investors shall abide by the laws and administrative regulations on foreign exchange management in China, and go through all formalities of foreign exchange examination and approval, registration, filing and change with the foreign exchange management authorities in a timely manner.
2. Basic system
Foreign investors should follow the following basic systems when acquiring domestic enterprises:
(1) If foreign investors contribute more than 25% of the registered capital of a foreign-invested enterprise established after the merger, the enterprise shall enjoy the treatment of a foreign-invested enterprise. If the proportion of foreign investors' contribution to the registered capital of a foreign-invested enterprise established after the merger is less than 25%, the enterprise shall not enjoy the treatment of a foreign-invested enterprise unless otherwise stipulated by laws and administrative regulations, and its borrowing of foreign debts shall be handled in accordance with the relevant provisions on borrowing foreign debts by domestic non-foreign-invested enterprises. If a domestic company, enterprise or natural person merges a domestic company and its affiliated relationship in the name of a company legally established or controlled overseas, the established foreign-invested enterprise shall not enjoy the treatment of a foreign-invested enterprise, except that an overseas company subscribes for the capital increase of a domestic company or an overseas company increases its capital to an enterprise established after the merger, and the capital increase accounts for more than 25% of the registered capital of the established enterprise; Foreign-invested enterprises established in this way shall enjoy the treatment of foreign-invested enterprises if the proportion of foreign investors other than their actual controllers in the registered capital of the enterprise is higher than 25%. The treatment of foreign-invested enterprises established after the merger and acquisition of domestic listed companies by foreign investors shall be handled in accordance with relevant state regulations. Among them, the examination and approval authority is the Ministry of Commerce of People's Republic of China (PRC) or the provincial commerce department (hereinafter referred to as the "provincial examination and approval authority"), the registration authority is the State Administration for Industry and Commerce of People's Republic of China (PRC) or its authorized local administration for industry and commerce, and the foreign exchange management authority is the State Administration of Foreign Exchange of the People's Republic of China or its branches. If the foreign-invested enterprise established after the merger belongs to a specific type or industry that should be examined and approved by the Ministry of Commerce according to laws, administrative regulations and rules, the provincial examination and approval authority will forward the application documents to the Ministry of Commerce for examination and approval, and the Ministry of Commerce will decide whether to approve or not according to law.
(2) The merger and acquisition of domestic related companies by domestic companies, enterprises or natural persons in the name of companies legally established or controlled abroad shall be reported to the Ministry of Commerce for approval. All parties shall not evade the above requirements by investing in China by foreign-invested enterprises or by other means.
(3) If a foreign investor obtains the actual control right through the merger and acquisition of a domestic enterprise, which involves key industries, factors that affect or may affect the national economic security, or causes the actual control right of a domestic enterprise with a well-known trademark and a Chinese time-honored brand to be transferred, the parties concerned shall report to the Ministry of Commerce. If a party fails to declare, but its M&A behavior has or may have a significant impact on national economic security, the Ministry of Commerce may, jointly with relevant departments, require the party to terminate the transaction or take other effective measures to transfer the relevant equity and assets, so as to eliminate the impact of M&A behavior on national economic security.
(4) If a foreign investor acquires equity, the foreign-invested enterprise established after the acquisition shall inherit the creditor's rights and debts of the merged domestic company. If a foreign investor purchases assets, the domestic enterprise that sells the assets shall bear its original creditor's rights and debts. Foreign investors, merged domestic enterprises, creditors and other parties may reach a separate agreement on the disposal of creditor's rights and debts of the merged domestic enterprises, but the agreement shall not harm the interests of third parties and social public interests. The agreement on the disposal of creditor's rights and debts shall be submitted to the examination and approval authority. Domestic enterprises selling assets shall notify creditors at least five days before investors submit application documents to the examination and approval authorities, and make an announcement in newspapers at or above the provincial level distributed nationwide.
(5) The parties to the merger and acquisition shall take the appraisal result of the assets appraisal institution on the equity value to be transferred or the assets to be sold as the basis for determining the transaction price. Both parties to the merger may agree on an asset appraisal institution established in China according to law. Assets appraisal should adopt internationally accepted appraisal methods. It is forbidden to transfer equity or sell assets at a price significantly lower than the evaluation result, and transfer capital abroad in disguise. If foreign investors merge domestic enterprises, resulting in the transfer of property rights of changes in equity or state-owned assets, they shall abide by the relevant provisions on the management of state-owned assets.
(6) The parties to the merger shall explain whether there is any relationship between the parties to the merger. If two parties belong to the same actual controller, each party shall disclose its actual controller to the examination and approval authority, and explain whether the purpose of the merger and the evaluation result meet the fair market value. Both parties shall not evade the above requirements through trust, custody or other means.
(7) If a foreign investor merges a domestic enterprise to set up a foreign-invested enterprise, the foreign investor shall pay the full consideration to the shareholder who transferred the equity or the domestic enterprise that sold the assets within 3 months from the date of issuing the business license of the foreign-invested enterprise. If the time limit needs to be extended due to special circumstances, after approval by the examination and approval authority, more than 60% of the total consideration shall be paid within 6 months from the date of issuance of the business license of the foreign-invested enterprise, and all the consideration shall be paid within 1 year, and the income shall be distributed in proportion to the paid-in capital contribution. When a foreign investor subscribes for the capital increase of a domestic company, the shareholders of a limited liability company and a domestic joint stock limited company established by way of sponsorship shall pay no less than 20% of the newly-increased registered capital when the company applies for the business license of a foreign-invested enterprise, and the rest of the investment time shall comply with the provisions of the Company Law, the Foreign Investment Law and the Regulations on the Administration of Company Registration. Where other laws and administrative regulations provide otherwise, such provisions shall prevail. When a joint stock limited company issues new shares to increase its registered capital, shareholders shall subscribe for new shares in accordance with the relevant provisions on the payment of shares for the establishment of a joint stock limited company. Where a foreign investor purchases assets, the investor shall stipulate the investment period in the contract and articles of association of the foreign-invested enterprise to be established. Where a foreign-invested enterprise is established to purchase and operate the assets of a domestic enterprise through an enterprise agreement, the investor shall pay the capital contribution equivalent to the consideration of the assets within the prescribed time limit for consideration payment; The remaining capital contributions shall comply with the relevant provisions on the establishment of foreign-invested enterprises. If a foreign investor merges a domestic enterprise to establish a foreign-invested enterprise, and the proportion of foreign investor's contribution is less than 25% of the registered capital of the enterprise, and the investor's contribution is in cash, it shall be paid within 3 months from the date of issuing the business license of the foreign-invested enterprise; Investors who make contributions in kind or industrial property rights shall pay in full within 6 months from the date when the business license of the foreign-invested enterprise is issued.
(8) As a means of payment for M&A consideration, it shall comply with the provisions of relevant national laws and administrative regulations. If a foreign investor uses its legally owned RMB assets as a means of payment, it shall be approved by the foreign exchange bureau. If foreign investors use the equity they have the right to dispose of as the means of payment, it shall be handled in accordance with relevant regulations.
(9) The foreign investor agrees to purchase the equity of the shareholders of the domestic company. After the domestic company is changed into a foreign-invested enterprise, the registered capital of the foreign-invested enterprise is the registered capital of the original domestic company, and the proportion of foreign investors' capital contribution is the proportion of the purchased equity to the original registered capital. If a foreign investor subscribes for the capital increase of a domestic limited liability company, the registered capital of the foreign-invested enterprise established after the merger shall be the sum of the registered capital of the original domestic company and the capital increase. On the basis of assets evaluation of domestic companies, foreign investors and other original shareholders of the merged domestic companies shall determine their respective capital contribution ratios in the registered capital of foreign-invested enterprises. If a foreign investor subscribes for the capital increase of a domestic joint stock limited company, it shall determine the registered capital in accordance with the relevant provisions of the Company Law.
(10) In the case of equity merger and acquisition by foreign investors, unless otherwise stipulated by the state, the upper limit of the total investment of foreign-invested enterprises established after the merger shall be determined according to the following ratio; If the registered capital is less than US$ 2,654.38 million, the total investment shall not exceed 65,438+00/7 of the registered capital; If the registered capital exceeds US$ 2,654,380+to US$ 5 million, the total investment shall not exceed twice the registered capital; Where the registered capital is more than USD 5 million to USD 6.5438+0.2 million, the total investment shall not exceed 2.5 times of the registered capital; Where the registered capital exceeds120,000 USD, the total investment shall not exceed 3 times of the registered capital.
(1 1) When purchasing assets, foreign investors should determine the total investment of the foreign-invested enterprise to be established according to the transaction price of the purchased assets and the actual production and operation scale. The ratio of the registered capital to the total investment of the foreign-invested enterprise to be established shall comply with the relevant provisions.
3. Approval and registration
(1) In the case of foreign investors' equity merger and acquisition, investors should submit the following documents to the examination and approval authority with corresponding examination and approval authority according to the total investment, enterprise type and industry of the foreign-invested enterprise established after the merger: the shareholders of the merged domestic limited liability company unanimously agree to the foreign investors' equity merger and acquisition resolution, or the shareholders' meeting of the merged domestic limited liability company agrees to the foreign investors' equity merger and acquisition resolution; An application for merger and acquisition of a domestic company as a foreign-invested enterprise according to law; The contract and articles of association of the foreign-invested enterprise established after the merger; An agreement for foreign investors to purchase the equity of shareholders of domestic companies or subscribe for capital increase of domestic companies; The financial audit report of the merged domestic company in the latest fiscal year; Notarized and legally certified investor identity certificate or registration certificate and credit certificate; A description of the enterprise invested by the merged domestic company; Business license (copy) of the merged domestic company and its invested enterprise; The employee placement plan of the merged domestic company, etc. If the acquisition of the business scope, scale and land use right of a foreign-invested enterprise established after the merger involves the permission of other relevant government departments, relevant permission documents shall be submitted together.
(2) When a foreign investor merges assets, the investor shall submit the following documents to the examination and approval authority with corresponding examination and approval authority according to the total investment, enterprise type and industry of the foreign-invested enterprise to be established, and in accordance with the provisions of laws, administrative regulations and rules on the establishment of foreign-invested enterprises: the resolution of the property right holder of the domestic enterprise or the competent authority to agree to sell assets; An application for the establishment of a foreign-invested enterprise; The contract and articles of association of the foreign-invested enterprise to be established; The asset purchase agreement signed between the foreign-invested enterprise to be established and the domestic enterprise, or the asset purchase agreement signed between the foreign investor and the domestic enterprise; Articles of association and business license of the merged domestic enterprise (copy); Notice of the merged domestic enterprise, announcement of proof of creditor's rights and explanation of whether the creditor raises any objection; Notarized and legally certified investor identity certificate or business opening certificate and relevant credit certificate; The employee placement plan of the merged domestic enterprise, etc. If a foreign investor agrees to purchase the assets of a domestic enterprise and set up a foreign-invested enterprise with the assets, it shall not conduct business activities with the assets before the establishment of the foreign-invested enterprise.
(3) Unless otherwise stipulated, the examination and approval authority shall decide whether to approve or disapprove the merger and acquisition of domestic enterprises and the establishment of foreign-invested enterprises by foreign investors within 30 days from the date of receiving all the required documents. If approval is decided, the approval certificate shall be issued by the examination and approval authority. If a foreign investor agrees to buy shares of shareholders of a domestic company, and the examination and approval authority decides to approve it, it shall also send a copy of the relevant approval documents to the foreign exchange administration authorities at the place where the equity transfer is terminated and the place where the domestic company is located. The foreign exchange administration organ at the place where the equity transferor is located shall handle the foreign exchange registration of the foreign exchange income from the share conversion and issue relevant certificates. The foreign exchange registration certificate of foreign exchange income from share conversion is an effective certificate to prove that the consideration paid by the foreign party for purchasing the equity has been put in place.
(4) Where a foreign investor purchases assets, the investor shall, within 30 days from the date of receiving the approval certificate, apply to the registration authority for registration of establishment and obtain a business license for a foreign-invested enterprise. Where a foreign investor acquires equity, the acquired domestic company shall apply to the original registration authority for registration of change and obtain a business license for a foreign-invested enterprise.