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On February 27, the Financial Commission Office of the CPC Shanghai Municipal Committee, the Shanghai Office of China Securities Regulatory Commission, and the Shanghai Stock Exchange (SSE) jointly held another symposium on mergers and acquisitions (M&A) and restructuring for Shanghai-listed companies. Over 20 market institutions, including securities firms, equity investment companies, commercial banks, accounting firms, and law firms, attended the event. The symposium aimed to discuss the market conditions and typical cases of M&A activities in Shanghai since the second half of last year. It also sought to gather opinions and suggestions from market participants, build consensus, and further promote the implementation of the Opinions on Deepening Market Reform in Mergers and Acquisitions of Listed Companies ("M&A Six Opinions"), the Eight Measures on Deepening the STAR Market Reform and Serving Scientific and Technological Innovation and the Development of New Quality Productive Forces ("STAR Market Eight Measures"), and the Shanghai Action Plan for Supporting Mergers, Acquisitions and Restructuring of Listed Companies (2025-2027) (the titles is an unofficial English translation for reference only, hereinafter referred to as the Action Plan). These efforts are intended to support Shanghai's goal of becoming a global M&A hub, enhance the quality of listed companies, and better leverage the capital market's unique role in serving technological innovation and the development of new quality productive forces.
According to statistics, since the release of the "STAR Market Eight Measures" on June 19, 2024, companies listed on the STAR Market have initiated nearly 80 M&A transactions. The number of transactions has more than doubled, all of which are industry-related M&As. Among these, the number of significant cash acquisitions and share issuance transactions has surpassed the total from 2019 to 2023. Several innovative cases have adopted "share issuance + targeted convertible bonds + cash" hybrid payment models, differential pricing, as well as acquisitions of overseas listed companies, unprofitable assets, and pre-IPO enterprises. Since the release of the "M&A Six Opinions" on September 24, 2024, the SSE has seen over 460 new asset transactions, including 53 significant asset restructuring and share issuance transactions for asset purchases. The number of transactions has increased by nearly 50% compared to the five months prior to the release of the "M&A Six Opinions". More than 80% of asset purchases focus on developing new quality productive forces.
The participating institutions agreed that regulators have introduced a series of new policies for mergers and acquisitions (M&A) and restructuring since last year. These reforms have enhanced the inclusiveness of regulations, stimulated market vitality, and boosted market confidence, receiving widespread approval from all market participants. The SSE has been strengthening communication with the market and promoting policy awareness, and have taken multiple measures to ensure the effective implementation of these policies, leading to positive market responses. SSE-listed companies have focused on industry integration in their M&A activities. The level of transaction activity has significantly increased compared to previous years and shows no signs of slowing down. Notable cases have emerged frequently. Significant progress has been made in leveraging the capital market's primary role in M&A activities, better serving the transformation and upgrading of listed companies, and fostering the development of new quality productive forces. In response to some new situations and issues that have emerged recently, the participating institutions also put forward relevant suggestions. These include: facilitating more exemplary cases to alleviate market concerns; coordinating efforts to optimize regulations on cross-border M&A; increasing support for M&A funds in participating in M&A activities of listed companies; and conducting regular M&A business training and communication sessions to deepen understanding and expertise.
Zhou Xiaoquan, the executive deputy director of the Financial Commission Office of the CPC Shanghai Municipal Committee, stated that they will focus on implementing the Action Plan and promoting more representative M&A cases in Shanghai. They aim to leverage the resource advantages of Shanghai as an international financial center to enhance M&A service levels and improve the M&A market ecosystem. Building a global M&A hub in Shanghai will be an integral part of the city's international financial center development, serving the high-quality growth of industries and enterprises nationwide through M&A activities. The next phase will focus on four key areas to further enhance M&A activities: integrating M&A resources to foster a concentrated hub for M&A activities; implementing pilot policies that facilitate M&A and restructuring to address bottlenecks and challenges; organizing high-caliber M&A conferences to boost the influence and visibility of M&A activities; and cultivating M&A professionals to build a solid foundation for M&A operations.
A senior official from the Shanghai Office of China Securities Regulatory Commission stated that they will actively implement the spirit of the Several Opinions on Strengthening Supervision, Preventing Risks and Promoting High-Quality Development of the Capital Market. Following the decisions of China Securities Regulatory Commission, they will take a steady and progressive approach and promote stability through progress. Firstly, actively implementing the "M&A Six Opinions" and the Action Plan. Through joint visits, seminars, and research, they will provide policy support to companies listed on the SSE, aiming to facilitate more high-quality M&A and restructuring cases. Secondly, by focusing on high-quality M&A and restructuring, the initiative aims to promote vertical integration along the industrial chain and horizontal consolidation among industry peers. This will elevate the quality of companies listed on the Shanghai Stock Exchange to new heights. Thirdly, adhering to the regulatory principle of robust fundamentals and stringent supervision, efforts will be made to genuinely prevent various forms of "deceptive" M&A and restructuring activities, effectively protecting the rights and interests of small and medium investors.
A senior official from the SSE noted that building a well-regulated, orderly, vibrant, and effective M&A market is crucial for improving the quality of listed companies. It is also essential for accelerating the development of new industrialization, fostering new quality productive forces, promoting industrial transformation and upgrading, and serving the construction of Shanghai as an international financial center. Under the guidance of China Securities Regulatory Commission, the SSE will continue to focus on risk prevention, strong regulation, and promoting high-quality development. Leveraging the distinctive features of the SSE's main board, known for its "large-cap blue-chip" stocks, and the STAR Market, characterized by its "hard technology" orientation, the SSE will enhance the inclusiveness and adaptability of its systems and regulations, and the goal is to fully implement the "M&A Six Opinions" and the "STAR Market Eight Measures", ensuring their detailed and thorough execution; Priority support will be given to the M&A of science and technology enterprises that are engaged in tackling key core technologies. More efforts will be put to cultivating and expanding leading scientific and technological enterprises and chain-leading enterprises, and better serving the development of new high quality productive forces and self-reliance in science and technology; The SSE will deepen its "Three Open-Doors (open-door review, open-door supervision, and open-door service)" service model, increasing research and communication with market participants to understand their needs and gather insights; Continuous improvements will be made to the market ecosystem, creating a favorable environment for M&A and restructuring activities. It is hoped that all market institutions will perform their respective duties and responsibilities, further play their subjective initiative and professional roles, strengthen the publicity of M&A policies, accelerate the launch of more iconic and representative cases, and jointly promote the quality improvement of listed companies and the healthy development of the capital market.
