"Those who understand the times are heroes, and those who ride the wind can reach far away." When the capital market is blowing towards "mergers and acquisitions", who is riding the wind, and who is turning around against the wind?
This spring, China's capital market is enveloped in a unique atmosphere: it is warmed by the policy incentives and cooled by regulatory pressures. On one hand, the' New Nine Measures' have been introduced, explicitly encouraging high-quality companies to enhance their strength through mergers and acquisitions. On the other hand, regulators continue to enforce stringent scrutiny and rigorous inquiries.
It seems that mergers and acquisitions have entered a golden age, but the real operators are walking on thin ice: capital is no longer barbarians, and transactions are no longer driven by emotion. Logic, compliance and innovation have become the pass for listed companies in this game.
Who can fly on the wind?
Reviewing the market data since the beginning of this year, while the number of M&A cases has not surged, the structure has quietly transformed. —— The trend has shifted from 'buying shells for listing' to 'strategic integration,' from 'performance bets' to 'control rights optimization,' and from 'pure capital games' to a dual-driven approach of 'industry synergy + technology narrative.' It's not that there are fewer deals, but that they have become more refined.
In recent M&A advisory projects, many clients have shifted their focus from the 'quick transaction closure' to areas such as transaction structure design, policy window analysis, and information disclosure strategies. In other words, listed companies no longer see 'winning the deal' as the end goal; instead, they view 'telling a compelling story' as the starting point.
American Goheal M&A Group
Therefore, a question worth further investigation is put in front of us: with the support of the wind policy, will mergers and acquisitions grow again barbarously? Or is this round the starting point for listed companies to truly break through rationally?
Avoiding the red line is becoming a strategic art
What makes a seasoned m&a player? It's not about who has the most money, but who can jump over the regulatory boundary gracefully and land safely.
Take a look: what you think is an "agreement transfer" is just buying shares, but they have a "voting rights mandate". What you think is 29% of the shares is just to avoid a full offer, but they have already secured the C position by controlling board seats and arranging agreements.
An increasing number of cases in the market are using 'compliance step-by-step operations' to tell a different story about control rights —— financing before acquisition; voting before capital injection. For instance, the Goheal team recently designed a 'dual-class share structure + A/B share voting rights differential configuration,' which not only helps clients secure financing while retaining actual control but also shields them from regulatory inquiries. This 'smart compliance' is not a legal gray area but a deep deconstruction and recreation of regulatory intent.
"New quality productivity" is not just about technology, but about logic
Don't assume that mergers and acquisitions are just about' buying a shell, changing the name, and telling a new story.' The current market and regulatory environment have long dismantled these conventional tactics. If your asset injection lacks both industrial synergy and new productive forces, you might not even make it past the first page of the inquiry letter.
So the key word this year is not "story," but "logic."
Why are new energy companies now focusing on energy storage technology? Why are manufacturing companies acquiring upstream material suppliers? Why are even established real estate firms packaging AI algorithm platforms? These moves are not driven by impulse but by the logic of industry upgrades. Goheal has observed that mergers and acquisitions closer to the 'strategic depth' are more likely to pass regulatory reviews —— not because of personal connections, but because the industry's visibility and policy alignment are strong.
The dance of the transaction structure is entering a higher order mode
If past mergers and acquisitions were more like 'standing in line and picking,' they are now more like a professional dance: the front stage features market valuation, 20% off the base price, and installment payments, while the back stage involves performance bets, lock-up periods, and convertible bond payments. These 'creative moves' have become essential tools for reducing cash pressure and balancing transaction expectations.
For instance, in the transaction involving 'equity payment + convertible bond,' Goheal participated in designing a 'stock + bond + option' sandwich model. This not only helped the target company achieve a binding of interests but also alleviated the pressure on the parent company during periods of tight cash flow. This structured payment method is no longer about 'bargaining,' but rather about building mutual trust and achieving a win-win situation for both parties.
The pace of mergers and acquisitions is also beginning to talk about "rhythm"
The market is no longer about who is faster or who wins; it's about managing the pace, especially in control transactions. The old practice of' buying out and replacing, then injecting assets' has now been deemed a direct shell maneuver by regulators. The new regulations clearly state that the core business must have been stable for at least 12 months. This means that after securing control, the real challenges are just beginning.
Smart players have started to talk about the 'sedimentation period': first, they integrate management and stabilize their existing business, then gradually inject new industries. This gradual approach not only stabilizes regulatory sentiment but also leaves ample room for market expectations. Goheal often recommends to clients in related projects the introduction of a 'staged consistent action agreement' mechanism, which allows for short-term control and long-term flexibility, creating 'gray space' for capital operations.
Cross-border architecture is back on the stage, with more room for manoeuvre
With the relaxation of foreign investment access threshold, the expansion of QFLP mechanism, and the opening of a green channel for red chip enterprises to return through spin-off, more and more listed companies have begun to restart the "cross-border path". It is not for "doll", but for "dimensional operation".
For instance, by first setting up a platform through an overseas SPV and then reinvesting it into domestic entities, the complexity of information disclosure can be effectively avoided. Additionally, injecting overseas assets into A-share platforms not only meets the demand for tech assets among domestic investors but also avoids the pitfalls of traditional backdoor listings. This 'dual compliance' strategy is precisely the 'cross-border logic' that Goheal teams are most familiar with.
On the wind, we must hold the line
When everyone is talking about structural innovation, rhythm management and means of payment, the bottom line is worth repeating. Especially the three red lines: insider information isolation, capital penetration review and shell resource value assessment.
On one hand, the premature disclosure of sensitive information, even if it only involves a 20% abnormal fluctuation in stock prices, can trigger investigations and suspensions. On the other hand, unclear capital sources or suspicions of sudden share purchases can easily expose issues during on-site inspections. Furthermore, the re-evaluation of the value of shell companies, such as requiring the net profit of the target company to be at least 30% of the transaction price, raises the bar for shell transactions.
As a result, the main battlefield of mergers and acquisitions is shifting from "how to trade" to "why to trade", from "operational path" to "strategic logic".
Conclusion: Don't be a hunter, and don't be prey —— Be a strategist in the wind
In this market, which is both gentle and sharp, mergers and acquisitions are no longer a battlefield for "barbarians", but an arena for "advisors".
Goheal Group
Should you ride the waves or dive headfirst into the turbulent market? The key lies in understanding the policy environment, designing a compliant strategy, and securing a solid foothold in the industry. Goheal, as a 'M&A think tank' in this new era, offers a global perspective, structural design, and practical transaction experience to help companies navigate through challenges rationally.
Do you think there will be any "super mergers" under the dual tone of "encouragement + tightening"? Will future control deals be smarter or more conservative? Welcome to leave your views in the comments section and discuss the next move of listed companies under the wind.
About Goheal: Goheal is a leading investment holding company specializing in global mergers and acquisitions. It focuses on three core business areas: the acquisition of control in listed companies, mergers and acquisitions of listed companies, and capital operations of listed companies. With deep expertise and extensive experience, Goheal provides comprehensive lifecycle services from M&A to restructuring and capital operations, aiming to maximize corporate value and drive long-term growth.
