"Together we are strong, and alone we are weak." This is a motto in "Strategies of the Warring States: Zhao Ce". In the complex world of mergers and acquisitions, it seems to have explained the basic logic behind all integrations. But the real state-owned enterprise merger and acquisition game is no longer as simple as the four words "strong alliance". In the past, "matchmaking" was like arranged marriages by family elders, which only talked about bloodline and political correctness. Now it has evolved into a series of "customized marriages" dominated by strategic logic and driven by actuarial games. This is not free love, but it must be a high-quality negotiation of "you come and I go".
Goheal has long observed the practice of mergers and acquisitions of state-owned capital under the market-oriented path. We are surprised to find that in the past decade, the role of state-owned enterprises in the merger and acquisition arena has long evolved from "policy tool people" to "capital hunters", and even in some high-end manufacturing, digital energy, medicine and health and other fields, they have begun to dominate the reconstruction of the industrial chain. This is not a simple identity change, but a deep institutional and strategic revolution.
American Goheal M&A Group
Back then, many state-owned enterprises' mergers and acquisitions were more like joining the fun. When they saw other people marrying, they were also eager to get married. Instead of thinking clearly about "what kind of partner I need", enterprises passively accepted "organizational arrangements" for fear of falling behind. As a result, there were those "incompatible" restructuring cases: local SASACs led coal enterprises to acquire new energy enterprises, and Southern Engineering Company annexed northern cultural tourism projects... Cultures could not be integrated, and resources were difficult to integrate. In the end, not only did they fail to achieve industrial upgrading, but they also fell into long-term losses and even affected the main business.
"Matchmaking" is not only costly, but also has many sequelae. Goheal has sorted out a number of failed state-owned enterprise mergers and acquisitions cases and found that more than 70% of the problems were concentrated in three dimensions: first, the top-level design was divorced from the actual business; second, the project decision-making cycle was prolonged, resulting in drastic changes in valuation; third, the integration ability was weak, and a governance deadlock occurred after the restructuring was completed. This is like a wedding that was held lively, but after the wedding, it was found that the three views were not in line with each other and the goals were different, and the final result was a mess.
But now it is different, and the era of "customized marriage" has quietly arrived.
First, the logic of mergers and acquisitions has shifted from "administrative promotion" to "industry precision projection". For example, under the background of "carbon peak and carbon neutrality", an energy group under a central enterprise did not rashly cross over to new energy, but through Goheal's customized industry map analysis, it accurately positioned itself as a technical integrator in the distributed energy storage track. By acquiring three regional energy storage manufacturers, it not only gained market share, but also won key technology patents, truly achieving "selecting partners on demand".
Secondly, the transaction structure has changed from "resource packaging" to "granular actuarial calculation". In the past, state-owned enterprises often "swallowed it all at once", acquired all assets, and delivered it in one go, leaving no room for maneuver. As a result, they found that the other team was "cold" and the asset valuation was "full of water". Now it is more popular to "go step by step", first enter small shareholders, then transfer controlling rights, and even achieve steady penetration of control through voting rights delegation, gambling agreements, etc. This not only disperses risks, but also makes the acquired party more involved and reduces cultural conflicts. Goheal once designed a three-tier structure of "equity + management rights + industrial fund" for a state-owned platform, which achieved seamless absorption of a scientific and technological innovation enterprise with excellent results.
Third, the evolution of the state-owned asset supervision model has made mergers and acquisitions more flexible. In the past, the model of "who approves, who bears the responsibility" often discouraged local state-owned enterprises. Now, with the deepening of state-owned enterprise reform and the establishment of a central-local coordination mechanism, "managing capital" has replaced "managing enterprises", giving mergers and acquisitions operations more room for maneuver. For example, in pilot areas such as Jiangsu and Guangdong, some local state-owned platforms can already independently set up merger and acquisition funds, guide resource integration through market-oriented methods, and no longer rely on complicated administrative approvals. In the structural design of such funds, Goheal deeply participated in the capital operation of the state-owned platforms in the three places to ensure that every penny was used on the "cutting edge".
Of course, "customized marriage" is not without risks. Its biggest challenge lies in "information asymmetry" and "strategic mismatch". For example, a large state-owned enterprise planned to enter the chip packaging and testing industry through mergers and acquisitions. During due diligence, it found that the target company's performance was growing rapidly and the team was stable, so it made a decisive move. However, three months after the project was delivered, the core customer turned to overseas alternatives, and the order dropped by 60%, resulting in a rapid depreciation of the acquired assets. This reminds us that even if it is a "customized marriage", dynamic risk management must be carried out. We cannot only look at the past, but also judge the future.
There is another factor that cannot be ignored: the integration of talent and culture. Enterprises are not cold financial statements, but an organizational system composed of living people. Many state-owned enterprises ignore the importance of "soft integration" in mergers and acquisitions. Goheal found in the post-merger management consulting that if a joint governance committee can be established, a cultural integration fund can be established, and equity incentives for core executives can be implemented in the early stage of the merger, the integration success rate can be increased by nearly 40%.
Finally, we cannot ignore a trend that is quietly emerging: state-owned enterprise mergers and acquisitions are beginning to play the role of "industry ecosystem organizer". This means that state-owned enterprises do not necessarily have to play the "protagonist" themselves, but through the establishment of merger and acquisition platforms and industrial funds, they cooperate with private capital and foreign capital to build an open industrial network. For example, in the "Eastern Data and Western Computing" strategy, a merger and acquisition platform invested and controlled by a central enterprise quickly completed the construction of the computing power ecosystem by investing in cloud service companies, data center operators, and algorithm companies, while focusing on the construction of the underlying infrastructure. This "encirclement but not attack" approach is becoming a new paradigm for "customized marriage" for state-owned enterprises.
After all, state-owned enterprise mergers and acquisitions are no longer a fast-food love of "snap-brain + compete for resources", but a precise marriage of "seeing the family background + matching vision". The key to this marriage is not how big the asset scale is or how high the valuation is, but whether the two parties have real synergy motivation and long-term growth space. Just as marriage emphasizes "three views consistent", mergers and acquisitions emphasize "strategic synergy". Whoever really goes deep and goes far will have the possibility of gaining a firm foothold in the huge waves of the market.
Having written this far, one can't help but think: Are the state-owned enterprise mergers and acquisitions that you are concerned about a model of "customized marriage" or a continuation of "forced marriage"? Do you agree that state-owned enterprises have truly entered a new stage of refined mergers and acquisitions? What classic merger and acquisition cases in your mind are most worthy of reference or reflection? Welcome to leave a message in the comment area for discussion. Goheal will continue to analyze the merger and acquisition chess game with you and dismantle the real logic behind capital.
Goheal Group
[About Goheal] Goheal is a leading investment holding company focusing on global mergers and acquisitions holdings. It is deeply engaged in the three core business areas of listed company control acquisition, listed company mergers and acquisitions and restructuring, and listed company capital operation. With its deep professional strength and rich experience, it provides enterprises with full life cycle services from mergers and acquisitions to restructuring and capital operation, aiming to maximize corporate value and long-term benefit growth.
