news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

the big gift package of financial support for high-quality economic development presented by one bank, one bureau and one commission at the state council information office press conference on september 24 has been quickly fulfilled. during the press conference held in the morning, wu qing, chairman of the china securities regulatory commission, revealed that six measures to promote mergers and acquisitions will be issued. at 8 o'clock in the evening of the same day, the china securities regulatory commission officially issued the "opinions on deepening the reform of the merger and acquisition market of listed companies", which better played the role of the capital market as the main channel in corporate mergers and acquisitions by adhering to the market-oriented direction.

opinions of the china securities regulatory commission on deepening the market reform of mergers and acquisitions of listed companies

the opinions on deepening the reform of the m&a market of listed companies is about 1,400 words long, and mainly includes six parts: facilitating the development of new productivity, increasing support for industrial integration, improving regulatory inclusiveness, improving payment flexibility and audit efficiency, improving the service level of intermediary institutions, and strengthening supervision in accordance with the law. this is the "m&a 6" that clearly focuses on the m&a market, following the "science 8" of the "eight measures on deepening the reform of the science and technology innovation board to serve technological innovation and the development of new productivity". the following contents are worth noting:

1. support the science and technology innovation board and growth enterprise market listed companies to acquire upstream and downstream assets in the industrial chain and enhance the attributes of "hard technology" and "three creations and four innovations".

2. support listed companies with standardized operations to carry out cross-industry mergers and acquisitions that are in line with business logic around the needs of industrial transformation and upgrading and seeking a second growth curve, and accelerate the pace of transformation to new quality productivity.

3. support listed companies to acquire high-quality unprofitable assets that will help to fill in the gaps and strengthen the supply chain and improve key technology levels in light of their own industrial development needs, without affecting their ability to continue operating and setting up relevant arrangements to protect the interests of small and medium-sized investors.

4. implement a “reverse linkage” between the investment period of private equity funds and the lock-up period of shares acquired through restructuring to promote a virtuous cycle of “fund raising, investment, management and exit”.

5. encourage and guide leading listed companies to focus on their core businesses and increase the integration of listed companies in the industrial chain.

6. improve policy provisions such as share lock-up periods, and support mergers and acquisitions in the same industry and upstream and downstream between listed companies under different control, as well as mergers and acquisitions between listed companies under the same control.

7. support listed companies in traditional industries to acquire assets in the same industry or upstream and downstream, increase resource integration, and reasonably improve industry concentration.

8. support private equity investment funds to acquire listed companies in accordance with the law for the purpose of promoting industrial integration.

9. support the transaction parties to negotiate and determine the transaction price based on diversified valuation methods such as asset-based method, income method, and market method.

10. comprehensively consider the target asset's operating model, r&d investment, performance growth, comparable companies in the same industry, and pricing of comparable transactions, and evaluate the fairness of the m&a target's pricing from multiple angles.

11. when a listed company purchases assets from a third party, the two parties to the transaction can negotiate independently whether to set up a commitment arrangement.

12. encourage listed companies to make comprehensive use of payment tools such as shares, targeted convertible bonds, and cash to implement mergers and acquisitions and restructuring to increase transaction flexibility.

13. establish a mechanism for installment payment of restructuring share consideration and pilot a supporting fund-raising shelf issuance system.

14. establish a simplified review procedure for restructuring, streamline the review process and shorten the review and registration time for mergers and acquisitions between listed companies, and issuance of shares to purchase assets (not constituting major asset restructuring) by high-quality companies with standardized operations, a market value of more than 10 billion yuan, and an information disclosure quality evaluation of a for two consecutive years.

15. make good use of the "small and fast" and other review mechanisms, implement a "green channel" for mergers and acquisitions and restructuring of technology-based companies that have made breakthroughs in key core technologies, speed up the review process, and improve the convenience of mergers and acquisitions.

16. guide securities firms to increase investment in financial advisory services, regularly publish outstanding m&a and restructuring cases, increase the weight of financial advisory services in the classification evaluation of securities firms, and refine the evaluation standards.

17. strictly supervise "deceptive" restructuring, severely punish illegal acts such as fraudulent issuance, financial fraud, insider trading in mergers and acquisitions and restructuring, and crack down on all kinds of illegal "shell protection" behaviors.

at the same time, in order to implement the six articles on mergers and acquisitions, the china securities regulatory commission and the stock exchanges have revised the "administrative measures for major asset restructuring of listed companies" and other rules, and have also simultaneously solicited public opinions, which deserves follow-up attention.

the a-share market merger and acquisition wave may continue

mergers and acquisitions are important ways to achieve industrial integration and transformation and upgrading, optimize resource allocation, and help listed companies achieve high-quality development. they are also effective means to cultivate and develop new quality productivity under the current new situation. the new "nine national regulations" mentioned that listed companies are encouraged to focus on their main businesses and use mergers and acquisitions, equity incentives and other methods to improve the quality of development. support leading institutions to enhance their core competitiveness through mergers and acquisitions, organizational innovation and other methods. strengthen the supervision of mergers and acquisitions, strengthen the relevance of the main business, strictly control the quality of injected assets, increase the supervision of "backdoor listing", and accurately crack down on all kinds of illegal "shell protection" behaviors.

according to the reporter's follow-up report, the regulatory authorities continue to highlight the service to the recovery of the real economy and the high-quality development of the economy, focus on key areas such as serving new quality productivity, make good use of various capital market tools such as stocks, bonds, and futures, and take multiple measures to activate the m&a and restructuring market. for example, in february this year, the csrc's m&a and restructuring symposium proposed "multiple measures to activate the m&a and restructuring market" and deployed key tasks to support m&a and restructuring business; subsequently, the capital market "1+n" policy documents optimized the specific institutional rules for m&a and restructuring, including 8 articles of the science and technology innovation board to support m&a and restructuring on the science and technology innovation board, and the "opinions on strict implementation of the delisting system" to encourage absorption and mergers between listed companies.

judging from the data, the a-share market is currently entering a new round of m&a and restructuring cycle, and it is an "active period". from may to early september this year alone, a-share listed companies disclosed a total of 46 major asset restructuring projects, and 7 share issuance restructurings were submitted for registration with the china securities regulatory commission.

as of now, wind data shows that all a-share listed companies have disclosed a total of 155 restructuring events this year, involving 137 restructuring projects, an increase of about 13% in the number of projects compared with the whole year of 2023.

in 2024, the third plenary session of the 20th cpc central committee clarified the direction of comprehensively deepening reform and the route of industrial transformation, focusing on supporting new productivity, manufacturing, state-owned enterprise reform and other fields. based on the recent interviews and communications between cailianshe reporters and the industrial chain, listed companies and intermediary investment banks, most of the interviewees believe that with the release of policy dividends, the optimization of the market ecology and the improvement of the macro environment, the a-share market merger and acquisition wave may continue. there are three main expected directions:

first, current mergers and acquisitions are expected to focus on the future rather than immediate financial returns, and acquisitions of unprofitable assets that can improve core technology will be supported;

second, the policies are mainly focused on helping traditional industries to reasonably improve industrial concentration and enhance resource allocation efficiency through restructuring. for traditional industries, the strength of leading companies in the industry is expected to be further enhanced.

third, the current market pricing of survival of the fittest is not yet sufficient, and some companies that have not shown strong results in mergers and acquisitions still have room for growth in the future. specifically, it includes new quality productivity, especially the technology cultivation sector (tmt/defense and military industry, etc.); and advanced manufacturing, especially the merger and acquisition capacity integration sector (power equipment/mechanical equipment/automobiles, etc.). in addition, state-owned enterprise reform is also worthy of attention.

it is worth mentioning that in order to better play the role of the capital market as the main channel for mergers and acquisitions, stimulate the vitality of the mergers and acquisitions market, help listed companies and relevant market players understand the rules and grasp the latest regulatory guidelines, the shanghai stock exchange has compiled and publicly released the "a guide to rules, policies and cases for mergers and acquisitions of listed companies" to facilitate listed companies in planning and implementing mergers and acquisitions.

highlight 1: supporting listed companies to transform and upgrade towards new quality productivity

the csrc will actively support listed companies in mergers and acquisitions and restructuring around strategic emerging industries and future industries, including cross-industry mergers and acquisitions based on transformation and upgrading goals, acquisitions of unprofitable assets that help to fill in the gaps in supply chains and improve key technology levels, and support "two innovation" sector companies in acquiring upstream and downstream assets in the industrial chain, etc., to guide more resources and factors to gather in the direction of new quality productivity.

so far, emerging industries have become the main targets of mergers and acquisitions, especially the central state-owned enterprises have been active in mergers and acquisitions. the reporter noted that among the shenwan first-level industries, the top five industries of the merger targets since 2024 are electronics, computers, social services, pharmaceuticals and biology, and power equipment. in addition, among the restructuring projects disclosed since 2024, the enterprises that were acquired by central state-owned enterprises and became state-owned enterprises after the restructuring was completed are mainly distributed in the basic chemical, transportation and defense industries.

on september 19 this year, the stocks of china shipbuilding and china heavy industry corporation resumed trading. previously, the two companies announced that china shipbuilding intends to absorb and merge china heavy industry by issuing a-shares, with china shipbuilding as the absorbing party and china heavy industry as the absorbed party. after the completion of the share exchange and absorption merger, china heavy industry will terminate its listing and cancel its legal person status, and china shipbuilding will inherit and take over all assets, liabilities, businesses, personnel, contracts and all other rights and obligations of china heavy industry.

on september 8, salt lake industry co., ltd. announced that the company's actual controller, the state-owned assets supervision and administration commission of the qinghai provincial government, the controlling shareholder qinghai state investment group co., ltd., signed a cooperation agreement with china minmetals and its subsidiaries. the state-owned assets supervision and administration commission of the qinghai provincial government, qinghai state investment group co., ltd. and china minmetals intend to jointly establish china salt lake industry group co., ltd.

focus 2: encourage listed companies to strengthen industrial integration

while supporting the development of emerging industries, the capital market will continue to help traditional industries reasonably improve industrial concentration and resource allocation efficiency through restructuring. the integration needs of listed companies will be supported by improving the lock-up period regulations and greatly simplifying the review procedures. at the same time, through arrangements such as "reverse linkage" during the lock-up period, private equity investment funds are encouraged to actively participate in mergers and acquisitions and restructuring.

judging from the m&a cases disclosed this year, industrial chain integration has become an important "main line" for mergers and acquisitions of many listed companies. the reporter noted that as of mid-september, 136 a-share listed companies disclosed restructuring projects this year, which is more than the whole year of 2023. in terms of industry distribution, emerging industries such as tmt, social services, and pharmaceuticals and biology are the main target industries for mergers and acquisitions. in addition, many listed companies plan to carry out horizontal integration to promote cost reduction and efficiency improvement and improve market competitiveness.

point 3: further improving regulatory inclusiveness

the csrc will respect the market rules, economic rules and innovation rules while respecting the rules, and will further increase tolerance for matters such as restructuring valuation, performance commitments, peer competition and related transactions, so as to better play the role of the market in optimizing resource allocation.

the csrc will support listed companies to issue shares and convertible bonds and other payment instruments, pay transaction consideration and provide supporting financing in installments according to transaction arrangements, so as to improve transaction flexibility and capital utilization efficiency. at the same time, a simplified review procedure for restructuring will be established to greatly simplify the review process, shorten the review period and improve restructuring efficiency for listed companies that meet the requirements.

the reporter noticed that in order to implement the above requirements, the shanghai and shenzhen stock exchanges added a special section in chapter 5 of the "shanghai stock exchange listed company major asset restructuring review rules (draft for comments)" to make special provisions for simplified review procedures, and at the same time made adaptive adjustments to other individual clauses. the specific contents are as follows:

(i) clarify the applicable circumstances of simplified review procedures. the applicable scope includes two types of transactions: one is the merger by share exchange between listed companies, and the other is the issuance of shares by high-quality listed companies to purchase assets that does not constitute a major asset reorganization. high-quality listed companies refer to those with a total market value of more than 10 billion yuan and whose information disclosure quality has been rated a by the shanghai stock exchange in the past two years.

(ii) set up a negative list for simplified review procedures. first, the listed company or its controlling shareholder, actual controller, intermediary institution or its related personnel has been subject to administrative penalties by the csrc or disciplinary sanctions by the trading venue within a certain period of time, or has committed other major acts of dishonesty; second, the transaction plan has major and complex circumstances such as major precedents and major public opinion.

(iii) provision of the relevant mechanism of simplified review procedures. for restructuring transactions that meet the conditions of simplified review procedures, the exchange shall accept the case within 2 working days based on the verification opinions of the intermediary institutions and issue the review opinions within 5 working days after acceptance. the restructuring review agency of the exchange shall not conduct review inquiries and there is no need to submit the transaction to the m&a and restructuring committee for review.

(iv) strengthen the responsibilities of all parties in the simplified review procedure. listed companies and their related parties shall make a commitment that this transaction complies with the requirements of the simplified review procedure. the intermediary institutions shall be strictly responsible for verification and control, and independent financial advisors shall issue a clear and affirmative review opinion that this transaction complies with the requirements of the simplified review procedure. at the same time, in order to avoid the abuse of the simplified review procedure, the exchange shall strengthen post-event supervision of relevant restructuring transactions, and if any violation of the relevant provisions of the simplified review procedure is found, it shall be dealt with more severely in accordance with the relevant provisions.

point 5: improving the service level of intermediary agencies

an active m&a and restructuring market is inseparable from the functions of intermediary institutions. the csrc will guide securities companies and other institutions to improve their service capabilities, give full play to the role of transaction matching and professional services, and help listed companies implement high-quality m&a and restructuring.

based on industry observations and group interviews, securities firms need to strengthen industry research and improve their understanding of the industry in order to provide customers with more accurate consulting services. at the same time, securities firms should improve their pricing and issuance underwriting capabilities to help companies achieve optimal asset pricing and fund raising in mergers and acquisitions. in addition, securities firms should strengthen risk management and establish a sound risk control system to prevent and resolve financial risks and ensure the smooth progress of the merger and acquisition process.

point 6: strengthen supervision in accordance with the law

the csrc will guide all parties to the transaction to conduct mergers and acquisitions and restructuring activities in a standardized manner, strictly fulfill various legal obligations such as information disclosure, crack down on all kinds of illegal and irregular activities, effectively maintain the order of the restructuring market, and effectively protect the legitimate rights and interests of small and medium-sized investors.

the reporter noted that the securities regulatory system has effectively curbed the occurrence of major illegal and criminal cases by increasing the penalties for illegal and irregular behaviors and enhancing the deterrent effect of the law, which also plays a role in the field of mergers and acquisitions.