Abstract:
As a core capital operation mechanism,absorption merger holds significant importance for the high-quality development of enterprises,industrial structure upgrading,and market resource allocation optimization. This paper reviews the theoretical mechanisms of absorption merger,the practices of absorption merger among China's listed companies,and relevant representative cases. We summarize several main characteristics of absorption merger practices in China,manifested as merger parties being predominantly A-share listed companies,market-oriented absorption mergers having yet to achieve substantial breakthroughs,payment methods being primarily stock issuance,and absorption merger transactions being predominantly led by state-owned assets. Meanwhile,this paper identifies several challenges in absorption merger practices: difficulty in balancing the interests of all parties in market-oriented absorption mergers; absorption mergers facing pressure from multiple aspects,with additional challenges in creditor communication; difficulty in obtaining listing qualifications leading to strong shell-preservation motives of the actual controller of the company; relatively complex procedures for transferring assets,liabilities,and qualifications of absorbed companies; potential quality issues of some transaction targets that may not meet reorganization-related regulatory requirements and affect the completion of the transaction; and potential generation of substantial goodwill in absorption merger transactions between listed companies under different control. Based on these findings,this paper proposes policy recommendations regarding minority investor protection,procedures for the transfer and succession of qualifications,review standards,and the formulation of the share-exchange ratio.
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