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M&A financing
 
M&As are a way of business development and expansion by transferring the ownership or control rights of a target company, including a merger by absorption or incorporation that results in the transfer of all control rights and assets, and takeovers of part of the target company’s shares or assets. The purpose of an M&A is to maximize the synergy of the acquisition or merger through business expansion.

CMB’s M&A financing product portfolio includes granting M&A loans and funds and offering consulting services such as M&A planning and recommendations.

1. M&A loans

CMB extends M&A loans in local or foreign currencies for acquirers or holding companies to pay for shares. These loans are designed for Chinese customers to combine or acquire other business entities or completed facilities in China, or restructure assets or debts to facilitate their restructuring or reorganization strategies. As a special form of project loan, an M&A loan generally must be repaid with dividends, unlike other loans with a higher repayment priority.

2. M&A funds

CMB’s M&A fund is dedicated to the M&A of target companies. By acquiring the shares of a target company, the fund takes over control rights, restructures the company, and holds the shares for a period of time before selling them later. The M&A fund invests in a mature company, usually through an MBO or MBI deal, with the aim of controlling the target company.

3. M&A consultation

This product is designed to advise enterprises on significant transactions in the areas of ownership, capital structure, and business model. Significant transactions generally fall under three categories: business expansion activities such as mergers, acquisitions, and joint ventures; business contraction activities such as division, spin-off, and liquidation; and transfer of ownership and control rights such as share transfers, public company privatization, management buyouts, and reverse takeovers.

CMB offers the following consultation services for acquirers: assisting them to find and assess suitable target companies; providing a proposal that covers the takeover strategy, price, terms, and procedures and financial arrangements; assisting them to negotiate takeover terms with the relevant staff of the target company; and assisting them to prepare takeover-related documents and announcements.

CMB offers the following consultation services for target companies: tracking their share prices and giving early-warning; assisting them to develop a strategy against hostile takeover bids; assisting them to review the bid price of a friendly takeover offer in terms of fairness, and fully realize their value through negotiations with possible buyers; and assisting them to prepare related documents and announcements.

Note:
All the contents stated above are for your reference only. Please consult the local branch of China Merchants Bank for further information. China Merchants Bank reserves the ultimate right of interpretation for the contents in this page.