/china-merger-model

name: china-merger-model
description: Accretion/dilution and merger consequences analysis for A-share M&A transactions. Adapted from the original merger-model skill for Chinese GAAP, CAS accounting, and China market transaction structures. Triggers on "A股并购分析", "并购模型", "accretion dilution China", "merger model A-share", or "M&A consequences [company]".

china-merger-model

Purpose

Build **A股并购分析模型**, analyzing accretion/dilution, synergy capture, and purchase price allocation for M&A transactions involving Chinese companies.

Key Differences from US Merger Models

| Parameter | US M&A Model | China M&A Model | |-----------|-------------|-----------------| | Accounting | US GAAP / IFRS | CAS (企业会计准则) | | Tax rate | 21% | 25% (or 15% for 高新技术企业) | | Currency | USD | CNY | | Goodwill | Indefinite life | Amortized or tested under CAS | | Stamp duty | Negligible | 0.05% on equity transfer | | VAT on asset deals | Varies | 6% or 3% depending on 纳税人类型 | | Deal structure | Stock/cash common | 股权/资产/吸收合并 | | Premium | 20-30% typical | 20-40% typical for China |

Data Sources

Tier 0 — 万得 Wind（最全面付费数据）

• 覆盖：A股/港美股/基金/指数/债券/宏观/研报/分析（44个工具）
• MCP 服务：`wind-mcp`（需 `WIND_API_KEY` 密钥，以 `ak_` 开头）
• 优势：全市场覆盖面最广、数据最全面、包含研报和量化分析
• 密钥申请：https://aifinmarket.wind.com.cn/#/home

Tier 1 — 同花顺 iFind（付费精确数据）/ AkShare MCP（Tier-2 免费备选）

get_financials(ticker_acquirer, "income")   → Acquirer P&L
get_financials(ticker_target, "income")     → Target P&L
get_quote(ticker_acquirer)                  → Acquirer valuation
get_quote(ticker_target)                    → Target valuation
get_industry_stocks(industry="...")          → Peer comparables

Secondary Sources

• 巨潮公告 — transaction announcements (收购公告)
• 交易所 — deal-related filings
• 评估报告 — target valuation reports
• Wind / Choice — comparable transaction multiples

Workflow

Step 1: Transaction Setup

**Transaction structure (China-specific):**

| Structure | Description | Tax Impact | |-----------|-------------|------------| | 股权收购 | Acquirer buys target equity | 印花税 0.05% | | 资产收购 | Acquirer buys target assets | 增值税 + 契税 | | 吸收合并 | Target merged into acquirer | 印花税 on asset transfer | | 借壳上市 | Reverse merger / backdoor listing | Complex, case-specific |

**Key terms:**

| Term | Chinese | Notes | |------|---------|-------| | Purchase price | 交易对价 | Typically includes earnout | | Control premium | 控股权溢价 | 20-40% typical in China | | Earnout | 业绩承诺/对赌 | Common in China M&A | | Lock-up | 锁定期 | 12-36 months for sellers | | Stamp tax | 印花税 | 0.05% of deal value | | VAT | 增值税 | 6% on asset deals | | Deed tax | 契税 | 3-5% on real estate/assets |

Step 2: Sources & Uses

**Sources:**

| Source | Typical % | Notes | |--------|-----------|-------| | Cash on hand | 30-50% | Acquirer's existing cash | | Debt financing | 40-60% | Bank loans, bonds | | Equity issuance | 0-30% | 增发 / 定增 | | Seller financing | Variable | 卖方分期付款 common |

**Uses:**

| Use | Typical % | Notes | |-----|-----------|-------| | Equity purchase | 85-95% | 股权转让对价 | | Transaction fees | 2-4% | IB, legal, accounting | | 印花税 | 0.05% | Stamp tax | | 增值税 | 0-6% | On asset deals only | | Refinancing | Variable | Target debt repayment |

Step 3: Pro Forma Financials

**Pro forma balance sheet:**

• Acquirer BS + Target BS ± purchase accounting adjustments
• Goodwill calculation
• Debt assumption / payoff
• Cash funding

**Pro forma income statement:**

| Line Item | Acquirer | Target | Pro Forma | Synergies | Adjusted | |-----------|----------|--------|-----------|-----------|----------| | Revenue | | | A+B | | | | COGS | | | | | | | Gross Profit | | | | | | | OpEx | | | | | | | EBIT | | | | | | | Interest | | | | | | | Taxes | | | | | | | Net Income | | | | | |

**Synergy assumptions:**

• Revenue synergies: cross-selling, pricing power (typically modest)
• Cost synergies: headcount reduction, procurement savings, facility consolidation
• Implementation costs: integration costs in first 1-2 years

Step 4: Accretion/Dilution Analysis

**Per-share analysis:**

Pro forma EPS = (Acquirer NI + Target NI + Synergies - Incremental Interest) / Pro forma Shares

Accretion/(Dilution) = (Pro forma EPS / Acquirer Standalone EPS) - 1

**Typical thresholds:**

• Accretive: >+2%
• Neutral: -2% to +2%
• Dilutive: <-2%

**EPS accretion alone is insufficient** — also analyze:

• Cash EPS impact
• FCF per share impact
• ROIC accretion
• Strategic rationale

Step 5: Valuation Analysis

**Football field:**

| Method | Acquirer Standalone | Pro Forma | Premium Paid | |--------|--------------------:|----------:|-------------:| | Last price | | | | | 30-day VWAP | | | | | 90-day VWAP | | | | | Premium to peer median | | | |

**Transaction multiples:**

| Multiple | Acquirer | Target | Premium | |----------|----------|--------|---------| | EV/Revenue | | | | | EV/EBITDA | | | | | P/E | | | |

Step 6: China-Specific Considerations

**Earnout / 业绩承诺:**

• Very common in China M&A
• Typically 3-year profit commitment
• Compensation mechanism for shortfall
• Impacts deal accounting and future earnings

**Regulatory approval:**

• 经营者集中申报 (SAMR merger control)
• 外资安全审查 (if foreign buyer)
• 行业主管部门批准 (sector-specific)
• 反垄断审查 timeline: 180 days standard

**Tax optimization:**

• Step acquisition vs direct acquisition
• Asset deal vs equity deal trade-offs
• 特殊性税务处理 (special tax treatment) for restructuring

**Share issuance:**

• 定增 (private placement) approval process
• Lock-up periods for new shares
• Dilution impact calculation

Step 7: Scenario Analysis

**Bear/Base/Bull scenarios:**

• Revenue assumptions
• Synergy realization
• Integration costs
• Financing costs

Step 8: Output

**Standard merger model output:**

| Scenario | Standalone EPS | Pro Forma EPS | Accretion | Pro Forma P/E | P/E Multiple Change | |----------|---------------|---------------|-----------|---------------|--------------------| | Bear | | | | | | | Base | | | | | | | Bull | | | | |