Analysis on some problems of the most popular pape

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Analysis of several problems in the merger and acquisition activities of China's paper industry (I)

because even if the accounts receivable are large, if the possibility of recovery is small or the possibility of bad debts and dead debts is large, the existence of this asset or creditor's rights will lose significance, and sufficient provision for bad debts and dead debts should be made. Generally speaking, if the accounts receivable age is more than 1 year, the possibility of recovery is very small. If it has been more than 3 years, the possibility of recovery is almost zero...

paper industry has many characteristics, such as capital, technology, labor, energy intensive, etc. for acquirers, they should pay attention to paper industry investment, operation and market access, the difficulty of exit, stable return on investment, and whether it has good growth, To achieve the goal of market and profit maximization. Enterprise M & A is an economic activity with high risk. Whether it succeeds at one stroke is related to the future development of the company. Therefore, before making a merger decision, we must do preparatory work such as knowing, understanding, analysis, review, screening and decision-making. Without sufficient preparation in advance and risk assessment in the whole process, hasty mergers and acquisitions can easily lead to the failure of mergers and acquisitions

in the past 10 years, with the deepening of free trade and the expansion of global business strategy, the wave of corporate mergers and acquisitions has become stronger and stronger, and strong integration has a direct impact on the world economy. Compared with the small scale of mergers and acquisitions in China, in addition to the imperfect investment environment and underdeveloped economy, the small scale and low success rate of mergers and acquisitions are important factors affecting the activities of mergers and acquisitions in China. The total number of China's paper industry, large and small, is about 6000. In 1998, there were about 2600 companies with a sales revenue of more than 5million yuan. The output of paper and paperboard was 21.27 million tons, the product sales revenue was 73 billion yuan, and the total amount of profits and taxes was 5.62 billion yuan. With the intensification of market competition and the implementation of environmental protection policies, some less competitive enterprises are in danger of being eliminated, while some enterprises with distinctive operations and better rolling development are becoming stronger and stronger. This pattern of good and bad is constantly widening, providing a good choice for enterprise mergers and acquisitions. In order to gain a firm foothold and seize the commanding height of the market, many enterprises have adopted development strategies such as low-cost expansion and capital operation. Enterprise mergers and acquisitions have developed in recent years, and the scale of mergers and acquisitions has also been expanding. A more successful example is the merger of Shandong Chenming Paper Industry and Hubei Hanyang paper factory. In addition, there are no other notable M & A cases in China's paper industry. The reason is that we should start from the decision-making process of enterprise mergers and acquisitions. In order to make enterprise mergers and acquisitions successful, the following working processes must be fully considered and planned

1. Establishment of acquisition strategy

paper industry is an increasingly capital intensive industry. Its specialization, core, characteristics and large-scale sustainable operation are the basic requirements of the development strategy. The establishment of acquisition strategy must meet the requirements of the development strategy of this industry. The existence and development of an enterprise has its unique history and culture, and supports the enterprise to establish its own development path, that is, the acquisition target company must conform to the established acquisition strategy. The acquisition of paper industry by non affiliated enterprises such as an investment company is mostly used for "packaging" listing and stock market speculation, rather than long-term holding and operation, focusing on short-term commercial profit goals, mainly in favor of listed companies; The acquisition of paper industry by relevant enterprises, such as power plants and chemical plants, is mostly based on horizontal development, so as to ensure the product sales of the enterprise, resolve industrial risks and generate joint and several interests; Most of the peers' acquisitions of paper industry are rational and serious, because they want to hold for a long time and explore the market. The ultimate goal of Hefei's establishment of thermoplastic elastomer material and product technology innovation strategy is to produce economies of scale, because paper industry is an industry with high investment costs and is not easy to exit. Only enterprises with large-scale production, high level of specialization and strong core strength can win the initiative in the highly competitive market. Therefore, the establishment of acquisition strategy cannot be separated from the enterprise's own characteristics and industry development requirements, which is also the reason why most mergers and acquisitions should be carried out in the same industry

since the development of Chinese enterprises is relatively initial, the displacement is related to the magnitude and inherent concept of the movement of the position of the object in the process of movement. They are more enthusiastic about the multi-faceted (yuan) business strategy and have become the mainstream of enterprise mergers and acquisitions at present. The "comprehensiveness" is recognized by the public, such as Qingshan Paper's acquisition of a spice plant and fine chemical plant, and Henan Luohe Yinge paper's transfer of equity to a power equipment company, Yunnan Dali's purchase of the equity of a port investment service company has restricted the emergence of strong mergers and acquisitions among China's paper industry peers. In addition, local protectionism and administrative intervention are relatively strong, resulting in the regionalization of paper industry mergers and acquisitions, which is lack of depth and breadth. Therefore, formulating the M & a strategy is a mixture of business and culture. It is an activity in the Second Affiliated Hospital of Zhejiang University Medical College in Hangzhou, Zhejiang Province, and its arduousness should be fully taken into account

2. Options for acquiring target companies

at present, there are no more than four kinds of target companies that can be selected, or they can't pass the environmental protection standard and face the risk of being forcibly closed; Or the construction and working capital are insufficient, and the debt is too heavy to operate normally; Or the operation and management are in chaos, losing money for years and on the verge of bankruptcy; Or the equipment is aging, and the product is not marketable. We are looking forward to updating and adjusting. Few enterprises with good performance need to buy and merge in order to expand their business. The rise of dollar acquisition in some places is enough to explain the poor quality of the target company. When choosing the target company for acquisition, we should consider the legal person nature, geographical location, economic environment and current situation of the target company. The property rights of the enterprise are relatively clear, and the local administrative intervention is less, so it is easy to reach an agreement; Geographical location is also very important. We must pay attention to whether it is in coastal or inland areas, developed or poor areas, raw material production areas or product market areas. Enterprise competition is the competition of strength and market, as well as the competition of geographical location, because the two important factors of enterprise competitiveness are talent and information resources, which are concentrated in geographical location, The economic and investment environment also benefits from geographical location, which explains why the better developed paper industry is mainly concentrated in coastal areas and central areas. Therefore, the choice of the target company should first compare the legal person nature and geographical location of the company, because the legal person nature of the company is subject to local government and national policies, and it takes a lot of time and financial resources to change, and the gains outweigh the losses; Once the geographical location is determined, it is difficult to have room for change

3. Risk analysis of the target company

after establishing the acquisition strategy and the pre selection of the target company, the risk analysis of the target company should be fully carried out. Whether the target company is large or small, good or bad, there must be a process of risk analysis, and it must be carried out in depth. Risk analysis includes policy trend, industry development, raw material supply, product market, enterprise status and potential, financial status, operation and management level, contract and legal issues, environmental protection, human resources, business culture, etc. It is very important to generate perceptual knowledge through on-site investigation, and an expert group should be formed, whose members should include industry technical experts, accountants and auditors, economic experts, legal advisers, financing and merger experts, etc. on the basis of forming expert investigation reports, the list of risk analysis contents should be determined; Then, according to the preliminary results of the risk analysis of the target company, a reasonable merger and acquisition case is put forward. As mergers and acquisitions often have strong government behavior, it is particularly important to maintain smooth communication channels with local governments. Obtaining strong support from local governments is an important factor for the success of mergers and acquisitions, and the impact must be clearly indicated in the risk analysis. The reason why many mergers and acquisitions are sluggish is largely because the emergence of new lightweight automotive materials did not put forward new requirements for testing and other links before making the merger decision, and the risk analysis was fully carried out, so that the implementation plan to avoid the risk was not made in time when the risk occurred

4. Pre Acquisition Review of the target company

the internal quality of most of China's paper industry is relatively poor. In order to improve the selling price, the buyer always tries to package and hide before buying a company. When buying a company, the buyer must do a good job of pre Acquisition Review of the target company to understand in detail what kind of company it is buying. Therefore, the buyer must obtain the detailed original information of the target company through various channels and make a more accurate assessment under the review and analysis of relevant experts

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