Under the domestic financial system with indirect financing as the mainstay, traditional commercial banks often focus on deposits and loans. In 2005, major domestic commercial banks set up investment banking departments one after another, mainly engaged in non-traditional banking business including debt financing tools, syndicated loans, mergers and acquisitions, financial consultancy, equity financing and so on. In the second decade of this century, the comprehensive operation of commercial banks has been overwhelming. In addition to the traditional M&A loan business, all commercial banks are expanding their M&A business product lines, including M&A consultants, M&A loans, M&A syndicates, M&A bonds, M&A funds, M&A mezzanine financing, etc., in order to seize the opportunity in the tide of mergers and acquisitions and realize the business transformation of commercial banks themselves. Commercial banks have incomparable advantages over other financial institutions in developing M&A financial services.
Advantages of the whole industry chain. Commercial banks gather specialized financial consultants, financing consultants and financing arrangements for mergers and acquisitions, and at the same time, because of the advantages of customers and outlets, they have the advantage of business matching. In this sense, commercial banks occupy the whole value chain of M&A and restructuring business. Compared with many domestic securities companies and consulting companies, commercial banks can provide customers with all-round, fast, convenient and low-cost services in terms of scheme design, financing arrangements and follow-up support, and their advantages are unparalleled.
Advantages of M&A financing. Commercial banks are the main source of M&A financing for China enterprises, especially large enterprises. In the M&A financing market, the advantages of commercial banks are mainly manifested in: fast financing speed, strong financial strength, low capital cost, great flexibility and good financing reputation. Different from general investment banks, commercial banks pay more attention to long-term strategic partnership with enterprises. Banks not only participate in the whole process of enterprise merger and reorganization, but also participate in company structure adjustment, capital enrichment and re-approval, capital structure optimization design and so on. As a consultant for the sustainable development of enterprises. It is precisely because of the above reasons that bank loans have become an important source of funds for China M&A market.
Customer and information advantages. There are many customers in commercial banks, and the cooperation with customers is not limited to a single business, but also to understand the needs of customers and their actual operations. Commercial banks can give full play to customers' advantages and help customers find buyers and sellers through their own networks, which shows strong matching ability; At the same time, commercial banks can also give full play to their own channel advantages, closely cooperate with intermediaries such as securities companies, consulting companies, equity funds, accounting firms and law firms, exchange information, effectively achieve the matching and matching of M&A business, and improve the success rate of M&A transactions.
Integration advantages. The success of M&A mainly depends on whether the acquirer and the acquired party can effectively play a synergistic effect and whether the acquirer can effectively realize M&A integration. Commercial banks can help the merged enterprises to improve their performance and achieve synergy through various financial means, including financing structure optimization and trade financing. In addition, commercial banks can effectively restructure the debt structure of the acquired enterprise, adjust the bank relationship, help the acquirer to better control the cash flow of the acquired enterprise, and effectively reduce the merger risk.