M&A is the most important means for enterprises to develop in an extended way. At present, even though the domestic capital market is still underdeveloped, M&A activities have become very active and become an important means for enterprise groups to seek scale expansion, eliminate competitors and improve industrial complementarity. Moreover, some large enterprise groups have made exploratory achievements in the international market in their mergers and acquisitions. The main forms of M&A activities include direct absorption M&A, holding M&A, actual control M&A, etc. The specific equity structure design and operation techniques are flexible and diverse.

Although M&A is a shortcut for the rapid development of enterprises, it should be treated carefully when selecting enterprises as M&A targets. Mergers and acquisitions of enterprises are for the purpose of developing and strengthening themselves, mainly for two reasons: to further strengthen their strength by acquiring enterprises with the same industrial structure for their own development, such as a series of mergers and acquisitions launched by Galanz; secondly, mergers and acquisitions are related to their own main business, but not their own strengths. As the saying goes, the industry has expertise, learn from each other's strengths, and thus strengthen themselves. Of course, there are also some enterprises with other purposes, which will not be discussed here.

According to the industry relationship between the two parties, M&A can be divided into horizontal M&A, vertical M&A and mixed M&A. Horizontal M&A (horizontal M&A) refers to the M&A between enterprises that are in the same or horizontal related industries and produce and operate the same or related products. Vertical mergers and acquisitions (i.e. vertical mergers and acquisitions) refer to mergers and acquisitions between enterprises whose production and sales processes are in the upstream and downstream of the industrial chain, interconnected and closely linked. Mixed M&A refers to M&A between enterprises that are neither competitors nor realistic or potential customers or suppliers

M&A can be divided into bona fide M&A and malicious M&A. Goodwill M&A (i.e. friendly M&A) means that the target enterprise accepts the M&A conditions of the M&A enterprise and promises to provide assistance. Malicious M&A (hostile M&A) refers to the M&A forced by the M&A enterprise against the target enterprise when the management of the target enterprise is not clear about its M&A intention or is opposed to its M&A behavior.

M&A can be divided into direct M&A and indirect M&A. Direct M&A, also known as negotiated M&A, means that the M&A enterprise directly puts forward M&A requirements to the target enterprise, and the two parties negotiate through certain procedures to jointly agree on the terms of M&A, and then achieve the purpose of M&A according to the terms of the agreement. Indirect M&A, also known as tender offer, refers to that the M&A enterprise does not directly put forward M&A requirements to the target enterprise, but acquires the target enterprise's shares through the securities market at a price higher than the market price of the target enterprise's shares, so as to achieve the purpose of controlling the target enterprise

According to the legal status of the target enterprise after the completion of M&A, M&A can be divided into new type M&A, absorption type M&A and holding type M&A. Newly established M&A refers to the M&A in which both parties are dissolved and a new legal person is established. Absorption type M&A refers to the M&A in which the target enterprise is dissolved and absorbed by the M&A enterprise. Holding type M&A refers to the M&A in which both parties are not dissolved, but the M&A enterprise participates in the holding. According to the mode of capital contribution of the acquirer, M&A can be divided into cash purchase asset M&A, cash purchase stock M&A, stock for asset M&A and stock swap M&A. Cash purchase asset type M&A refers to the M&A in which the acquiring enterprise uses cash to purchase all or most of the assets of the acquiree. Cash purchase of stock M&A refers to the M&A in which the M&A enterprise purchases the stock of the target enterprise with cash. Stock for assets M&A refers to the M&A conducted by the M&A enterprise to issue shares to the target enterprise in exchange for most of the assets of the target enterprise. Stock swap M&A refers to the M&A conducted by the M&A enterprise directly issuing shares to the shareholders of the target enterprise in exchange for the shares of the target enterprise

M&A can be divided into mandatory M&A and free M&A according to whether the M&A enterprise has the mandatory obligation to acquire the equity of the target enterprise. Compulsory M&A refers to the M&A carried out by the M&A enterprise when it holds a certain proportion of the target enterprise's shares and may manipulate the latter's board of directors and affect the shareholders' rights and interests. According to the provisions of the Securities Law, the M&A enterprise has the mandatory obligation to issue a purchase offer to all shareholders of the target enterprise and purchase the target enterprise's shares held by shareholders at a specific price. Free merger refers to the merger in which the acquirer can freely decide to acquire any proportion of the equity of the acquiree.

M&A can be divided into leveraged buyouts and non leveraged buyouts according to whether the M&A enterprises use their own funds or not. Leveraged buyouts refer to mergers and acquisitions in which the acquiring enterprise obtains the property rights of the target enterprise through the capital financed by credit, and repays the liabilities with the future profits and cash flows of the target enterprise. Unlevered acquisition refers to the acquisition mode in which the acquisition enterprise does not use the target enterprise's own funds and operating income to pay or guarantee the acquisition price.

M&A is a complex enterprise behavior, which requires strong complementary or synergistic effects between the two parties, and usually occurs in enterprises with a certain scale. One thing that deserves special attention from M&As is that they must take into account the M&A effect after M&A. If they are not prepared enough, M&A may fail.