An acquisition is the purchase of one business or company by another company or other business entity. Consolidation occurs when two companies combine together to form a new enterprise altogether, and neither of the previous companies survives independently. Acquisitions are divided into "private" and "public" acquisitions, depending on whether the acquire or merging company (also termed a target) is or is not listed on public stock markets. Achieving acquisition success has proven to be very difficult, while various studies have shown that 50% of acquisitions were unsuccessful. The acquisition process is very complex, with many dimensions influencing its outcome. BEIJING, Jul 25, 2006 (SinoCast via COMTEX) -- China's top consumer electronics retailer Gome has successfully acquired its big domestic rival, Shanghai-based Yongle, revealed an insider. On a regular monthly-meeting held on July 23, the general manager for Gome's strategy development announced the news of the acquisition on behalf of the Gome Chairman Wong Kwong Yu, meanwhile asking the participating senior managerial staff to make related preparations for the following work. This paper focuses itself on the inspiration of successful acquisition of Yongle from Gome on Chinese Companies. This thesis is divided into four parts. Part one reviews the concept of acquisition. In this part, not only the concept of acquisition will be intorduced,some distinguish between merge and acquisition would also included. Part two mainly deal with the background for acquisition of Gome and Yongle Part three introduces the reasons for successful acquisition yongle from Gome.The last part offers the inspiration of successful acquisition of Yongle from Gome on Chinese companies.
Ⅰ. The Concept of Acquisition
1.1 The concept of Acquisition
In business, an acquisition is the purchase of one company (the target) by another (the acquirer, or bidder). In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company. Whether a purchase is perceived as being a "friendly" one or a "hostile" depends significantly on how the proposed acquisition is communicated to and perceived by the target company's board of directors, employees and shareholders. It is normal for M&A deal communications to take place in a so-called 'confidentiality bubble' wherein the flow of information is restricted pursuant to confidentiality agreements. In the case of a friendly transaction, the companies cooperate in negotiations; in the case of a hostile deal, the board and/or management of the target is unwilling to be bought or the target's board has no prior knowledge of the offer. Hostile acquisitions can, and often do, ultimately become "friendly", as the acquiror secures endorsement of the transaction from the board of the acquiree company. This usually requires an improvement in the terms of the offer and/or through negotiation.
"Acquisition" usually refers to a purchase of a smaller firm by a larger one. Sometimes, however, a smaller firm will acquire management control of a larger and/or longer-established company and retain the name of the latter for the post-acquisition combined entity. This is known as a reverse takeover. Another type of acquisition is the reverse merger, a form of transaction that enables a private company to be publicly listed in a relatively short time frame. A reverse merger occurs when a privately held company (often one that has strong prospects and is eager to raise financing) buys a publicly listed shell company, usually one with no business and limited assets. There are also a variety of structures used in securing control over the assets of a company, which have different tax and regulatory implications: The buyer...