On the other hand, in China, M&A activities in the capital market are mostly driven by policies and systems, rather than technologies and industries. This is a special phenomenon in the transition economy at a specific stage and cannot represent the future development trend of M&A market.
Third, financial innovation is an important external driving force. The realization of large-scale M&A transactions depends on feasible payment instruments, including issuing common shares, preferred shares, bonds and derivatives. In the fourth wave of mergers and acquisitions, financial innovations such as "junk bonds" and "leveraged buyouts" made it possible to "fight big with small ones" and the forms of mergers and acquisitions became more diversified.
On the other hand, in China, M&A has limited payment tools and narrow financing channels in the capital market, which limits the prosperity of the M&A market.
Fourth, investment banks play a decisive role in the wave of mergers and acquisitions. In the first wave of mergers and acquisitions, the planning of investment bankers such as Morgan and Hill promoted the integration of steel and railway industries. After 1960s, with the rise of independent investment banks such as Goldman Sachs Group, investment banks participated in M&A transactions extensively. In M&A The 5th Wave, major investment banks have received a lot of commissions from M&A business, and some even exceeded the income of other investment banks.
On the other hand, in China, M&A's financial consulting business is now more reflected in channel business and license business, and investment banks have limited room for creativity. From the end of 19 to now, the United States has experienced six relatively large waves of mergers and acquisitions.
The first wave occurred at 1893 after the first American economic crisis, with a peak of 1898- 1903 and ending at 1904. This wave of mergers and acquisitions is mainly
Characterized by horizontal mergers and acquisitions, the purpose is to expand the scale of enterprises, increase market share, realize economies of scale and resist the risks of economic crisis. Trust is the first enterprise form caused by merger and acquisition. The most direct result is that the number of enterprises has decreased sharply, the scale of individual enterprises has expanded rapidly, and a large number of monopoly enterprise groups have appeared at the same time.
The second wave occurred in the 1920s. Compared with the first wave, horizontal mergers and acquisitions still account for a large proportion at this time, but at the same time there have been considerable vertical mergers and acquisitions, and oligarchy and economies of scale are still important motives for this kind of mergers and acquisitions. A by-product is that although the merged company is still dominated by holding, subtle changes have taken place in the property rights structure caused by the merger, that is, the merger has not led to the absolute concentration of enterprise property rights, on the contrary, the shareholding ratio of shareholders is getting lower and lower. This wave of mergers and acquisitions laid the foundation of American industrial structure, and more importantly, established the basic model of modern enterprise management, that is, the final separation of enterprise ownership and management rights. 1929 The American economic crisis led to the end of this wave of mergers and acquisitions.
The third wave began in the 1950s and reached its climax in the late 1960s. This wave of mergers and acquisitions has two obvious characteristics: first, mixed mergers and acquisitions are more horizontal and occupy the main position, and second, cross-border mergers and acquisitions have sprung up. Due to the germination of global economic integration, the spatial distribution of large enterprises began to diversify, but it also left a certain development space for specialized small and medium-sized enterprises. By the early 1970s, the total number of American enterprises had increased by more than 80% compared with the early 1950s. Due to the oil crisis, this wave has subsided.
The fourth wave occurred in the 1980s and reached its peak at 1985. This wave of M&A has the following characteristics: First, from the scale of M&A, the total payment of M&A transactions has increased substantially in each year, and the number of large-scale M&As has increased significantly; Secondly, due to the use of leveraged buyout strategy and the emergence of junk bond financing means, there has been a situation of "small fish eat big fish". In addition, cross-border mergers and acquisitions are on the rise.
The fifth wave rose rapidly in the early 1990s, followed by the fourth wave. This is a wave of internationalization, mainly concentrated in information industry, civil aviation, railway, military industry, finance and other industries, whether it is mergers and acquisitions or target companies.
The molds are all very big. This wave has four new characteristics: first, it created a calendar on a total scale.
Part I Industrial M&A
Historical records; Second, a considerable number of mergers and acquisitions have taken place between giant multinational companies, and there has been an obvious trend of strong alliance; Third, mergers and acquisitions in the financial industry have intensified significantly; Fourth, most enterprises have abandoned leveraged buyouts and turned to investment banks. The remarkable feature of this wave is friendly mergers and acquisitions, active strong alliance, showing the "strategic alliance" in modern enterprise management.
The sixth wave occurred three years after the bursting of the internet bubble, and the fifth wave of mergers and acquisitions ended in 2003; In 2006, the wave of mergers and acquisitions reached its peak; By 2007, the subprime mortgage crisis began and the sixth wave of mergers and acquisitions gradually receded. Compared with the previous five M&A waves, especially the recent fifth M&A wave, the sixth M&A wave has the following remarkable characteristics: ① a large number of resource acquisitions have taken place; ② extensive participation of PE funds; ③ The proportion of cash payment increased; 4 valuation returns to rationality. The blind self-confidence of management has been adjusted, the situation of driving up the price of mergers and acquisitions has decreased, and the valuation level of the acquired party has returned to rationality.
By analyzing the United States
history
In the recent six M&A waves, we found the following laws for China to learn from:
First, the six M&A waves occurred in the period of sustained high-speed economic growth and stock market prosperity in the United States, and the "bull market" was more likely to stimulate M&A activities. As shown in the figure below, the shaded part represents the year when the M&A wave lasts.
China's Real GDP (Logarithm) —— A schematic diagram of the relationship between M&A wave of Dow Jones index (Logarithm) and macro-economy and stock market prosperity.
Second, technological revolution is the endogenous power and catalyst of enterprise merger and acquisition. The emergence and maturity of emerging technologies have brought a severe impact on the industrial structure, almost every technological revolution.