Since 2006, the hot wave of security capital mergers and acquisitions in the Chinese market has swept through waves. Some international giants have formed a series of security product lines in the shortest time through a series of global mergers and acquisitions, and have gained advantages in security competition. In recent years, especially after the financial crisis, the Chinese market has been increasingly valued by foreign-invested companies and they have set up camps in China. According to investigations, there are currently more than 100 foreign security companies in the Chinese market. These companies have adopted localization strategies almost without exception. One of them is the acquisition of Chinese companies. Under such circumstances, how companies in China respond to the risks faced by foreign capital mergers and acquisitions and how to develop healthily has become a common concern of enterprises and government departments.
First, the model of foreign mergers and acquisitions
After entering the new millennium, China’s use of foreign capital has shown a trend of diversification. Foreign mergers and acquisitions of domestic companies have gradually become an emerging form of foreign investment in China. In 2003, in order to better regulate and manage such commercial activities, the Ministry of Foreign Trade and Economic Cooperation was used as the front end, joint taxation, industry and commerce and other related departments to formulate the Provisional Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors. With the changes in China's business environment, the relevant departments have continuously revised and improved this provision, making it the most important department regulation in this field in China. In June 2009, in order to ensure that the regulations were in line with the newly enacted "Anti-Monopoly Law" and other related laws and regulations, the Ministry of Commerce issued the latest "Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors", again clarifying related to foreign capital M&A. Management principles and management methods for matters.
For the concepts and models of foreign capital mergers and acquisitions, there are clear definitions and explanations in the regulations. The so-called foreign capital mergers and acquisitions are foreign investors and domestic non-foreign-invested enterprises, and the commercial activities that take place through equity mergers and acquisitions and asset mergers and acquisitions. It can be seen that the main modes of foreign capital M&A are equity mergers and acquisitions and asset mergers and acquisitions. Among them, equity mergers and acquisitions means that foreign investors purchase shares of domestic non-foreign-invested enterprise shareholders or subscribe for domestic companies to increase capital, so that the domestic companies are changed and established as foreign-invested enterprises; asset mergers and acquisitions refer to the establishment of foreign-invested enterprises by foreign investors, and The enterprise agreement purchases the domestic enterprise assets for the purpose of operating the assets, or the foreign investor purchases the assets of the domestic enterprise, and establishes a foreign-invested enterprise to operate the assets.
Second, the purpose of foreign mergers and acquisitions
Before analyzing the risks of foreign capital's acquisition of Chinese companies, the author believes that it is necessary to first understand the original intention and purpose of the foreign-funded enterprises in China's mergers and acquisitions. Only under the premise of clarifying the purpose and direction of its mergers and acquisitions, can we reasonably analyze and judge risks in a more targeted way.
In recent years, especially in the construction of safe cities, the Beijing Olympics, and the 'maintenance' pressure and other large market demand, China's security industry has achieved rapid development. The rapid increase in demand in the domestic market has attracted a large number of overseas companies into China to seek new development. The continuous spread of the financial crisis is a strategy that allows many overseas companies to constantly adjust their business operations in China; it also strengthens resource input in the region. Looking at the development of the global security industry, we can find that today's suppliers in the security industry are gradually shifting from a product manufacturer to a system integration service provider. The key to market competition also gradually reflects the overall implementation capabilities of the security system. Therefore, in order to continuously enrich its own product lines, major global security production companies, through the power of capital, through mergers, quickly realize the enrichment of product sequences; in order to achieve its own overall service capabilities.
It is precisely for this reason that we must realize that the acquisition of foreign investment in local security companies is primarily due to the comprehensive consideration of improving its own industrial chain in the global field. Secondly, it is the result of the localization strategy that a large number of foreign-funded enterprises have implemented to open up the Chinese market. It hopes to rapidly acquire the leading position in the Chinese industrial market by acquiring local production capacity, talents, channels and other resources.
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