According to the progress of the restructuring review disclosed by the China Securities Regulatory Commission on the evening of August 15, the reorganization application of Zhongyuan Concord and Changfang Lighting was suspended due to the suspected illegal investigation. In the case of encouraging mergers and acquisitions at the policy level, what are the reasons for the recurrence of listed companies’ reorganization? What changes in the market are reflected?

The reasons for termination are different. "The recent mergers and acquisitions have a blowout situation. In terms of probability, there will be some unsuccessful or terminated reorganizations." Ma Xiaodong, a senior analyst at the financial website, said that the main reason for termination is due to advancement. In the process of restructuring, the relevant interests have not been discussed and other factors.

In order to promote this major asset reorganization, the general enterprises conducted many consultations with the intermediary agencies and the reorganized parties, conducted in-depth discussions and communication on key cooperation conditions, and finally failed to reach an agreement on the relevant important transaction terms. The company will consider the business situation, acquisition cost and acquisition risk factors of the restructured party, and proceed from the protection of the interests of all shareholders and the maintenance of market stability. After careful consideration, it is decided to terminate the implementation of the reorganization.

In the process of mergers and acquisitions negotiations, the quality of the M&A assets and the evaluation price are important, but some companies have been terminated for mergers and acquisitions due to suspected violations. The progress of the restructuring review disclosed by the China Securities Regulatory Commission on the evening of August 15 showed that the application for reorganization of Zhongyuan Concord and Changfang Lighting was suspended due to the suspected illegal investigation.

"The reasons for terminating mergers and acquisitions are various. The problems of negotiating bargaining, violation of relevant laws and regulations, and unapproved regulatory authorities will lead to the failure of mergers and acquisitions," said Ren Haoning, a senior researcher at China Investment Consulting.

"In order to successfully achieve mergers and acquisitions, the management of listed companies needs to fully consider their own strengths and weaknesses, as well as the future development direction. It is necessary to consider the factors of government industrial policies and industry development trends." Ma Xiaodong said that the listed company terminated the reorganization instructions. It is difficult for all parties to reach an agreement for the time being, and it also shows that the company considers the problem in the process of promoting restructuring and does not consider all issues comprehensively.

<br> <br> still an objective look at the phenomenon of frequent termination of reorganization, which signals revealed? Li Chaoyu, an analyst at Fortune Securities, believes that this reflects that the capital market is gradually entering a mature stage, and the characteristics of restructuring marketization become more apparent. Ren Haoning, a senior researcher at China Investment Consulting, also believes that the increase in the number of cases of termination of reorganization does not mean that China's capital market is not perfect and the ability to acquire mergers at the enterprise level is weak. It just shows that the more stringent review mechanism of the regulatory authorities can veto illegal mergers and acquisitions, thus avoiding After the assets are injected into the listed company, the legitimate interests of ordinary shareholders are infringed. "On the other hand, it also shows that under the current active capital market, new business models are emerging, but still need to wait for the market and investors, consumers to test." Li Chaoyu said.

However, from the perspective of the reasons for the failure of restructuring, the issue of shareholding structure is one of the factors in the termination of many mergers and acquisitions. Some of the shares involve complicated cross-shareholdings behind them, which may result in some mergers and acquisitions being impossible. This requires a more market-oriented equity trading system and the gradual completion of the legal system.

"The increasing number of cases of termination of reorganization shows that there is still room for further marketization in China's equity freedom. In addition, the estimation of considerations requires the support of more professional third-party intermediaries." Li Chaoyu said that the consideration is the merger of shares. The issue of price accounting involves accounting for intangible assets, such as goodwill and credit. If the premium or discount is not the same, this will also lead to many parties unable to reach a consensus. Therefore, more professional market third-party intermediaries are needed to set standards or improve them.

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