Policy-Market Synergy Creates New Opportunities for M&A in STAR Market

Edited and Translated from Shanghai Securities News—www.cnstock.com

Since the beginning of this year, a series of policies including the Opinions on Deepening Market Reform in Mergers and Acquisitions of Listed Companies and the STAR Market Eight Measures have been rolled out to support the M&A and restructuring market. These measures have spurred M&A activity and led to a surge in number of deals by STAR Market-liseted companies and positive market reactions. According to statistics, since the release of the STAR Market Eight Measures, 31 new M&A transactions have been disclosed, more than doubling compared to the same period last year. Another four transactions have seen substantial progress. The total scale of these disclosed M&A deals approaches RMB 15 billion.

Recent trends in STAR Market M&A cases exhibit the following characteristics. First is acquisition of unprofitable assets. Since the introduction of the STAR Market Eight Measures, over 10 disclosed M&A plans on the STAR Market involves acquisition of unprofitable targets. Second is acquisition of IPO candidates. Examples include Smartgiant Technology Co., Ltd.'s acquisition of Kekai Electronics, whose IPO application has been withdrawn; and Chengdu Qinchuan IoT Technology Co., Ltd.'s acquisition of Pvirtech, a company under coaching period of an IPO. Third is cases of innovative, exemplary, and guiding characteristics. Examples include the first case at Shanghai Stock Exchange using targeted convertible bonds as a payment method, as well as cases reflecting enhanced valuation inclusiveness. Fourth is cross-border M&A cases. 6 of the recently disclosed M&A plans on the STAR Market involve acquiring foreign assets, covering Shanghai Microport Endovascular Medtech (Group) Co., Ltd., Suzhou Zelgen Biopharmaceuticals Co., Ltd., Jiangsu Aisen Semiconductor Material Co., Ltd., Micro-Tech (Nanjing) Co., Ltd., Grandit Co., Ltd. and other STAR Market-listed companies.

According to an official of Shanghai Stock Exchange, the SSE will further enhance communication, support listed companies in effectively utilizing M&A policy tools, and drive high-quality development of listed companies.

Excerpted from Shanghai Securities News on October 13, 2024

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The above information is provided for reference purposes only and does not constitute investment advice.