M&A strategy formulation

1. Target determination
 
Based on the company’s development strategy and market demand, determine the target type of mergers and acquisitions, such as horizontal mergers and acquisitions (expanding market share, enhancing competitiveness), vertical mergers and acquisitions (integrating the industrial chain, reducing costs) or mixed mergers and acquisitions (diversified operations, dispersing risks).
 
Analyze the industry status, market share, financial status, technical strength and other factors of the target company, and screen out potential targets that meet the needs of the company.
 
2. Value assessment
 
Use a variety of methods to evaluate the value of the target company, such as the income method (discounted cash flow method), market method (comparable company analysis method, comparable transaction analysis method) and asset-based method.
 
Consider the future development potential, synergy effect and other factors of the target company to determine a reasonable acquisition price range.
 
3. Risk assessment
 
Analyze the risks that may be faced during the merger and acquisition process, such as financial risk, legal risk, operating risk, integration risk, etc.
 
Formulate corresponding risk response measures to reduce merger and acquisition risks.

due diligence

1. Financial Due Diligence
 
Review the target company’s financial statements, including balance sheets, income statements, cash flow statements, etc., and verify the authenticity and accuracy of financial data.
 
Analyze the target company’s financial status, such as asset quality, debt level, profitability, cash flow, etc.
 
Evaluate the target company’s financial risks, such as debt risk, tax risk, accounting policy risk, etc.
 
2. Legal Due Diligence
 
Review the target company’s legal documents, such as company articles of association, contracts, litigation documents, etc., to ensure the legality and compliance of the company.
 
Analyze the target company’s legal risks, such as property rights disputes, contract disputes, labor disputes, etc.
 
Evaluate the target company’s legal environment, such as the impact of industry regulatory policies, changes in laws and regulations on the company.
 
3. Operational Due Diligence
 
Understand the target company’s business model, market positioning, competitive advantages, etc., and evaluate the company’s operating conditions and development prospects.
 
Analyze the target company’s supply chain, sales channels, customer groups, etc., and evaluate the company’s operating efficiency and market competitiveness.
 
Investigate the target company’s management team, technical talents, corporate culture, etc., and evaluate the company’s sustainable development capabilities.

Transaction structure design

1. Selection of acquisition method
 
Determine the acquisition method, such as equity acquisition, asset acquisition or merger.
 
Analyze the advantages and disadvantages of different acquisition methods and applicable conditions, and select the acquisition method that best suits the company.
 
2. Selection of payment method
 
Determine the payment method, such as cash payment, stock payment or mixed payment.
 
Analyze the advantages and disadvantages of different payment methods and their impact on the company’s financial situation, and select the most reasonable payment method.
 
3. Design of financing plan
 
If financing is required, formulate a financing plan, such as bank loans, bond issuance, equity financing, etc.
 
Analyze the costs and risks of different financing methods and select the best financing plan.

Negotiation and contract signing

1. Negotiation strategy formulation
 
Determine negotiation goals and bottom lines, and formulate negotiation strategies and skills.
 
Form a negotiation team, including professionals in finance, law, business, etc.
 
2. Contract terms negotiation
 
Negotiate the terms of the M&A contract, such as transaction price, payment method, delivery conditions, performance commitments, breach of contract liability, etc.
 
Ensure that the contract terms are in line with the interests and requirements of the enterprise and protect the legitimate rights and interests of the enterprise.
 
3. Signing and delivery
 
After reaching an agreement, sign the M&A contract.
 
Deliver according to the conditions and time agreed in the contract to complete the M&A transaction.

Integration and management

1. Strategic integration
 
Formulate the development strategy of the integrated enterprise and clarify the development direction and goals of the enterprise.
 
Integrate the business resources of the enterprise, optimize the business structure, and improve the market competitiveness of the enterprise.
 
2. Organizational integration
 
Adjust the organizational structure of the enterprise, optimize the management process, and improve the operational efficiency of the enterprise.
 
Integrate the human resources of the enterprise, arrange personnel positions reasonably, and stimulate the enthusiasm and creativity of employees.
 
3. Cultural integration
 
Analyze the cultural differences of the enterprise and formulate a cultural integration plan.
 
Promote the integration of corporate culture and enhance the cohesion and centripetal force of the enterprise.
 
4. Financial integration
 
Integrate the financial system of the enterprise, unify accounting policies and financial management processes.
 
Optimize the capital management of the enterprise and improve the efficiency of capital use.
 
5. Risk management
 
Identify the risks in the integration process and formulate risk response measures.
 
Strengthen the monitoring and evaluation of the integration process and adjust the integration strategy in a timely manner.