The way to invest in new construction involves not only building new production capacity, but also investing a lot of time and money to obtain a stable source of raw materials, establish effective sales channels, and explore and compete for markets. In the case of mergers and acquisitions, enterprises can make full use of the original enterprise's raw material sources, sales channels and market share, and can also use the original enterprise's channels to raise funds in the capital market, thus greatly reducing uncertainties in the development process and reducing risks and costs.
2. Cross-border M&A saves time in building factories.
For the manufacturing industry, the most basic advantage of M&A is that it can save the time of building factories, quickly obtain ready-made production factors, and immediately establish foreign production and marketing bases. Therefore, M&A is beneficial for enterprises to quickly seize market opportunities. Therefore, when the rapid entry into foreign markets becomes the main target of multinational companies' investment, M&A will inevitably become the preferred investment method.
3. Cross-border M&A can make full use of the experience curve effect.
Through mergers and acquisitions, the enterprise not only obtained the production capacity of the original enterprise and various
Assets are also the experience of the original enterprise, and the experience-cost curve effect is particularly important for mixed mergers and acquisitions. In new business areas, experience is usually an effective barrier to entry. Through hybrid mergers and acquisitions, a hybrid integrated enterprise established by bypassing entry barriers can share the experience of all parts and form a strong competitive advantage.
Through mergers and acquisitions, enterprises can enjoy and complement each other's experience, which includes not only the experience curve effect, but also their expertise in technology, market, patents, products, management and excellent corporate culture. Through mergers and acquisitions, enterprises can share or learn from the advantages of the above experience among various branches, resulting in complementary effects.
4. Competitive advantages in science and technology can be obtained through cross-border mergers and acquisitions.
Science and technology are playing an increasingly important role in economic development. The competition between product cost and quality often turns into the competition of science and technology. Therefore, in order to gain advantages in production or product technology, enterprises often conduct mergers and acquisitions.
5. Be able to quickly enter the host country and occupy the market.
Cross-border mergers and acquisitions have effectively lowered the threshold for entering new industries. First of all, when enterprises enter a new field, they will inevitably face the fierce reaction of existing enterprises. If they enter on a small scale, they will face a cost disadvantage. Secondly, due to product differences, users need to pay a high transfer fee to switch from the original products to the products of new entrants, which makes it difficult for new enterprises to occupy the market. Third, financial constraints. Some capital-intensive industries need huge investment, and there are great risks when enterprises enter, which leads to difficulties in financing. Fourthly, because the long-term close cooperative relationship has been established between the original enterprises and the sales channels, the new enterprises must break the market network of the original enterprises in order to obtain effective and reliable sales channels.
legal ground
Article 172nd of the Company Law of People's Republic of China (PRC)
Company merger can adopt absorption merger or new merger.
A company absorbs other companies for merger, and the absorbed company is dissolved. The merger of two or more companies to form a new company is a new merger, and the parties to the merger are dissolved.
Article 173 of People's Republic of China (PRC) Company Law
When a company is merged, all parties to the merger shall sign a merger agreement and prepare a balance sheet and a list of assets. The company shall notify the creditors within 10 days from the date of making the merger resolution and make an announcement in the newspaper within 30 days. Creditors may, within 30 days from the date of receiving the notice, or within 45 days from the date of announcement if they have not received the notice, require the company to pay off debts or provide corresponding guarantees.
Article 174th of People's Republic of China (PRC) Company Law
When a company is merged, the creditor's rights and debts of the merging parties shall be inherited by the surviving company or the newly established company after the merger.