Public companies' mergers and acquisitions deepen their shift toward "value creation," with multiple parties jointly exploring new industry trends

Currently, listed companies’ mergers and acquisitions are shifting from “scale expansion” to “value creation,” with new characteristics emerging in cross-border deployment, industry integration, and risk management. Recently, industry elites from regulatory agencies, listed companies, investment institutions, and intermediary organizations gathered at the Shanghai Stock Exchange International Investor Conference M&A Forum to discuss core topics such as “Cross-border M&A and Foreign Investment Strategies” and “New Quality Productivity M&A and Valuation Pricing.” Experts attending the event pointed out that with increased policy support and improved market mechanisms, the M&A market for listed companies is entering a new stage of “precision, internationalization, and ecosystem development.”

Industry Logic Guides M&A Direction; Strategic Collaboration Becomes the Core Benchmark

In recent years, the M&A market for listed companies has achieved both quantitative and qualitative growth under the dual influence of policy guidance and market demand. Since the release of the “Six Guidelines on M&A,” A-share mergers and reorganizations have moved from stable operation to a stage of quality improvement and efficiency enhancement, with transaction numbers, amounts, and quality all experiencing leapfrog growth. Companies related to new productivity have become the core targets of M&A.

“Merger and acquisition is not about ‘buying themes,’ but about focusing on the long-term development of the industry, enhancing global competitiveness through strengthening and complementing supply chains,” said Gao Yonggang, Chairman of Semiconductor Manufacturing International Corporation (SMIC) Juyuan. He noted that over the past two years, his team has facilitated more than 20 industry mergers, some of which have resulted in technological breakthroughs and supply chain collaboration.

This view is widely supported. Liu Zhe, head of M&A at CITIC Securities, stated that blind cross-industry M&A has a high failure rate. “Effective M&A should either focus on industry chain integration and restructuring or expand into new fields based on sufficient technological reserves.”

From the perspective of operating entities, the “dual-wheel drive” of state-owned enterprises and private enterprises is becoming more evident. Qian Jing, CEO of Morgan Stanley Securities (China), analyzed that state-owned enterprises rely on the “Belt and Road” initiative to deepen global resource deployment, while private enterprises demonstrate vitality in fields such as new energy. Meanwhile, foreign investment in China’s advanced industries is also deepening. Qian Jing mentioned that an agreement between a biopharmaceutical company and an international pharmaceutical giant to license exclusive rights has led to a reassessment of the value of Chinese innovative drug assets in the international market. Additionally, a multinational automaker acquired minority stakes in domestic new energy vehicle companies, marking the first external export of Chinese new energy vehicle platform technology.

Four-Dimensional Elements Build a Solid Foundation; Post-Merger Integration Becomes the Key to Value

Participants generally agree that the success of M&A depends not only on closing the deal but also on subsequent value creation. Clear strategic planning, aligned corporate culture, scientific valuation and pricing, and efficient post-merger integration are the four core elements of successful M&A.

A clear strategic positioning is the prerequisite for M&A. Gao Yonggang emphasized that semiconductor industry M&A must closely align with national strategies, using leading enterprises to build a diverse and symbiotic industrial ecosystem. In the medical device sector, Ge Hao, Chairman of Huitai Medical, cited the acquisition of Huitai Medical by Mindray Medical as an example. “Before the deal, we clarified our strategic goal—not just to expand scale but to achieve ‘internationalization + specialization’ through synergy. Therefore, immediately after the transaction, we dispatched a strategic planning team to develop plans based on clinical needs and market trends, which laid the foundation for successful integration.”

Cultural inclusiveness and resource investment are critical supports for integration. During the integration of Huitai Medical, Mindray Medical allocated over 200 personnel across 15 business and functional departments—nearly one-tenth of Huitai Medical’s original staff—to share resources and collaborate closely, achieving business synergy. “Cultural inclusiveness must be aligned with strategic firmness. It provides more lubrication and buffers during the integration process,” said Ge Hao.

Scientific valuation and risk control are vital guarantees for transactions. Currently, valuation methods in the M&A market are gradually aligning with international standards. Domestic valuation approaches centered on PE need further diversification, adopting more internationally accepted models to meet cross-border M&A needs. Guotai Haitong’s Business Director Yu Weijun and other intermediary representatives believe that the release of the “Six Guidelines” has significantly supported the quality and efficiency of A-share listed companies’ M&A and restructuring. However, technology M&A also faces challenges such as high valuations after multiple financing rounds, market investors’ focus on short-term positive effects, and the need for internationalized, diversified valuation methods. Market participants must be more tolerant and open, guiding rational judgment collectively to promote the development of innovative technology enterprises from an industry perspective. Yao Li from KPMG China emphasized that cross-border M&A requires an integrated due diligence methodology, focusing not only on traditional financial, tax, and legal risks but also on country-specific political risks, environmental risks, community relations, and compliance requirements to support transaction decisions comprehensively.

Post-merger integration and the realization of synergies are central to value enhancement. Gao Yonggang believes that compared to the transaction phase, post-merger integration and ongoing development are even more challenging. To develop into a globally competitive enterprise, the combined entity must undergo years of refinement and achieve strategic and technological alignment through professional integration. Deep collaboration in technology, channels, and management is essential to truly realize the value-creating potential of M&A.

Policy Ecosystem Drives Dual Efforts; Safeguarding and Upgrading the M&A Market

In the face of complex international environments and multiple challenges in cross-border M&A, regulatory agencies, operating entities, and intermediary organizations are working together through policy innovation, ecosystem building, and capacity enhancement to create a broader platform for Chinese companies’ cross-border M&A.

Policy support continues to strengthen, providing institutional guarantees for the M&A market. The implementation of cross-border share swap policies has become a significant breakthrough. Chen Jie, head of M&A at China International Capital Corporation (CICC), stated that this policy effectively alleviates foreign exchange and financial costs for enterprises, enabling deep integration between Chinese and foreign companies and opening new pathways for joint acquisitions and industrial cooperation.

The ecosystem is continuously improving, fostering collective efforts for market development. Participants suggested that future efforts should include establishing M&A alliance service organizations or global M&A information platforms to reduce information asymmetry and provide more training and exchange opportunities for industry practitioners. Intermediary organizations play a key role in the M&A market. Firms like KPMG and Guotai Haitong provide due diligence, transaction design, and integration consulting services, becoming important drivers of successful M&A.

With ongoing policy and ecosystem improvements, the M&A activities of listed companies are increasingly centered on “value creation,” advancing toward higher-quality development through precise deployment, international expansion, and ecosystem collaboration, injecting strong momentum into industry upgrading and high-quality economic growth.