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From a financial point of view the pros and cons of various M & Payment

M & A activity in the company, the payment is the final link to complete the transaction,vibram five fingers singapore, M & A transactions is a key success factor in the final one. In practice, mergers and acquisitions in the form of contribution has its own advantages and disadvantages, depending on which type of contribution to the specific circumstances. One, the so-called cash-cash M & M in cash for the payment of tools, with the replacement of the target company's assets in cash or cash to buy the target company's stock to achieve the purpose of acquisition of the target company. Company mergers and acquisitions motivated more cash will be the preferred method of payment M, because this payment method has its inherent advantages, mainly in: 1. Use of cash can be promptly and directly to M & A purposes. First of all, in the fierce competitive market conditions, choose a target company is not easy, which makes the decisive advantage of the cash acquisition of the company to rapidly achieve the acquisition of the purpose of payment instruments; otherwise, bid for rival companies can quickly raise cash to compete with . Second, conducting mergers and acquisitions, the target company's shareholders and the number of harbor hostility management, the target company is likely to be deployed in a reverse takeover, and mergers and acquisitions the company to hide the cash acquisition of the preparatory work of the opponent by surprise. 2. Cash mergers and acquisitions valued simple acquisition of the company's decision to reduce the time and avoid missing the best M & A opportunities. 3. Cash merger company mergers and acquisitions to ensure control over the curing. Once the target company has received its share of the cash payment, the company lost any interest in the original. For M & A side, the acquisition of companies with cash, existing shareholders will not be 4. Cash to pay the value of a stable payment. There is no change in the cash flow or liquidity problems, the target company's shareholders for the payment value is determined. Conducive to the shareholders in this regard as soon as possible to promote completion of the transaction on balance, on the other hand, shareholders who do not have afford to pay and the benefits of security uncertainty. But often these uncertainties to the target company's shareholders accept the deal will and enthusiasm. , Of course, a cash merger also has its drawbacks, mainly in: 1. Subject to capacity constraints instant cash. Because it requires the acquirer to determine the date of payment must be a considerable amount of money, which by the company's own cash position constraints. 2. The acquisition of companies in the market structure to occupy different status, ability to be quite different now, transaction size must be limited. 3. In the cross-border mergers and acquisitions, mergers and acquisitions by cash payment means that the party faces the risk of currency convertibility and exchange rate risk. 4. If the target company of the country where the tax guidelines require that the target company's stock after the sale, if realized capital gains would pay capital gains tax, then use the cash to buy the target company's stock will increase the target company the tax burden. It is because of the existence of cash constraints M & M's factor in the transaction, the acquiring company would consider acquisitions with stock and mixed mergers and acquisitions. Second, the stock acquisition stock mergers and acquisitions is the so-called convertible mode to get through the target company or control over the acquisition of property rights of contribution. The advantage is mainly manifested in: 1. Stock merger transaction size is relatively large, not by the current capacity constraints. M & A transactions in the target company is currently increasing scale, the use of cash to complete the M & M & A transactions, the acquisition of the company's real-time by the current capacity and future requirements of the cash recovery rate is very high. The use of stock mergers and acquisitions through the stock of the payment instruments, mergers and acquisitions the company without additional funding to pay for the acquisition, which will not make the company's working capital has been squeezed, reducing the cash pressures. 2. Stock merger transaction, the target company's shareholders will not lose their ownership interest, ownership of the target company is transferred to the ownership to the acquiring company. The company after the merger by the shareholders of the acquiring and target both the common control, but most of the original shareholders of the acquiring company still held the dominant control of the business. 3. Target shareholders benefit from the extended tax and low tax concessions. Compared with the cash acquisition, stock acquisition without too much consideration to the local tax guidelines and constraints on the bidding arrangements. If the good performance of M & A side, to the target company shareholders the stock is more popular than cash. According to regulations, the target company shareholders in the future to sell their shares in exchange only when their income tax, so that shareholders holding according to their needs, independent of the decision to return to achieve the time and enjoy preferential taxation policies. 4. With stock acquisition will enable the original shareholders of the target company valuation and M & A parties share the downside risk. Companies such as B T, the target is difficult to value, and mergers and acquisitions with cash. M & T company and found some However, with a stock acquisition, T shareholders will also share the loss. Its deficiencies mainly in: 1. Using stock mergers and acquisitions, will bring the newly acquired shares of the acquiring shareholders have the opportunity to get on the board, which makes the acquiring the equity structure of existing changes, the old shareholders equity ratio of companies have decreased the number of changes in equity cases is large enough, the old shareholders face the risk of losing control of the company.

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