"If you are new every day, you will be new every day, and new every day." The ancients encouraged themselves with the ambition of daily improvement, and today's companies also need to survive in the market with an enterprising attitude. Unfortunately, in reality, many listed companies are no longer talking about development, but survival. Mergers and reorganizations, which should have been the king bomb operation of the capital market to "become bigger and stronger", are now frequently given a meaning of "extending life".
At the end of 2024, the merger and reorganization cases in the A-share market were close to historical highs. Among them, more than 60% were not for strategic expansion, but for asset transfer, debt reduction, or simply "dumping burdens". In a word, it is to survive.
This makes people ask: Has the real underlying logic of mergers and reorganizations of listed companies slipped from "becoming bigger and stronger" to "surviving"?
From "expansion" to "survival"
Once upon a time, when it came to mergers and acquisitions, what came to mind was the images of Internet giants "swallowing" their opponents, the rapid integration of upstream and downstream of the new energy industry chain, and the soaring market value driven by capital.
But now the main theme has changed. Some companies no longer regard "mergers and acquisitions" as a strategic frontier, but as a "bomb disposal tool". Projects cannot be paid back, the main business has meager profits, and the balance sheet has turned red - these factors are pushing companies to "passively" fight.
According to Goheal's survey, more than 40% of the mergers and acquisitions projects last year were not originally intended for business collaboration, but for financial adjustments or debt resolution. Although this data is cold, it also reveals the truth: listed companies are using mergers and acquisitions to tear open a survival channel.
American Goheal M&A Group
For example, a real estate listed company, when its main business was rapidly shrinking and its cash flow was on the verge of drying up, suddenly announced that it planned to acquire 51% of the equity of a light-asset operating company in the form of share payment. It seemed to be "cross-border", but in fact it was an "asset replacement" self-rescue called mergers and acquisitions.
To survive, you must first "renew blood"
In the capital winter, if companies want to survive, they must first "renew blood" on their books.
This is why the "buffer strategy" is frequently used. Converting heavy assets into light assets, divesting loss-making subsidiaries, and using high-quality assets to attract investor confidence constitute the disguised shell of today's "strategic mergers and acquisitions".
Goheal once led and assisted a main board company on the verge of crisis, and through a series of capital maneuvers, it completed the transition from the downstream of the industrial chain to the role of "platform service". It is not that this company has become more "hardcore", but that it has distanced itself from the "ST label" through mergers and acquisitions.
In this process, Goheal no longer emphasizes the "scale consolidation" set, but pays more attention to the reconstruction of the "survival space" - how to free up enough resource pools so that companies can turn the game around again, which is the focus of their services.
The era of "storytelling" is over
A once widely circulated capital market joke is: "As long as you dare to tell a story, someone will dare to give money."
The reason why this joke worked in the past was because the market liquidity was abundant and the risk appetite was high. But now, supervision is becoming more stringent, and investors are becoming more rational. No matter how good the story is, the secondary market will not buy it without actual profit support.
Therefore, the M&A plan that originally relied on "capital fantasy" to leverage the market value has been gradually replaced by the hard-core logic of "turning losses around", "reducing debts" and "restoring hematopoietic ability".
A trend that is not noticed by the media is that the mergers and acquisitions of ST companies have begun to collectively "de-fantasize". The target company is no longer a "unicorn in the track bonus", but a "revenue bull car with clean books and stable business".
Goheal once admitted in an M&A consultant seminar that the word with the highest proportion in the logic of M&A in the past five years is "synergy", and the fastest growing word in the past two years is "stop bleeding".
This is no longer a strategic race towards the future, but a do-or-die stock game.
The real "self-help" is not to change a vest
Of course, M&A and restructuring are never a panacea. Its effectiveness depends on whether the company has truly solved the underlying problems, or just used M&A to change a vest and "extend life" through backdoor listing.
Many listed companies overestimate the "immediate" effect of mergers and acquisitions, ignoring the long-term pain of the integration period - cultural conflicts, management overlaps, business wrangling, and customer loss. If these problems are not solved, no matter how beautiful the mergers and acquisitions are, they can only become a one-time hormone for market value.
Goheal pointed out: Excellent mergers and acquisitions are the unity of "technique" and "Tao". Technique is the transaction structure, payment method, and consideration arrangement, and Tao is whether the company can obtain a second growth curve from the merger. If Tao is not established, no matter how exquisite the technique is, it will eventually collapse.
Therefore, instead of using mergers and acquisitions as "highlight props in the center of the stage", it is better to use it as a "pressure valve" for corporate transformation, gradually guide risks and force reforms.
It is "survival", not "survival"
When we say "M&A is not for becoming bigger and stronger, but for survival", we are not pessimistic, but hope that business owners and investors can see the reality.
This is an era that no longer relies on gimmicks to win. The companies that can truly cross the cycle are not necessarily those who have been shining and advancing, but those "hardcore survivors" who know how to turn around in time and know how to slow down and seek stability.
As the "University" says: "Knowing the limit leads to determination, and determination leads to tranquility." On the road of M&A, which is full of uncertainty, the one who survives is never the fastest, but the one who knows when to stop, adjust, and start again.
Goheal Group
So the question is: Facing the triple pressure of market cycle, regulatory policy and financing environment, can the current "survival" strategy of listed companies' M&A and restructuring really bring subsequent value returns? Should companies lay out a "regeneration strategy" in advance after "surviving"?
Welcome to leave your opinions in the comment area, we look forward to hearing the collision of different voices.
[About Goheal] Goheal is a leading investment holding company focusing on global M&A holdings. It is deeply engaged in the three core business areas of listed company control acquisition, listed company M&A and restructuring, and listed company capital operation. With its deep professional strength and rich experience, it provides companies with full life cycle services from M&A to restructuring to capital operation, aiming to maximize corporate value and achieve long-term benefit growth.
