| 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）
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 | | | | | |
Key outputs:
- Accretion/dilution by scenario
- Pro forma financials
- Transaction multiples
- Synergy value estimate
- Strategic rationale summary
Quality Checks
Before delivering:
Data Source Mode Switch: Set env var IFIND_DATA_SOURCE_MODE to control data source preference.
ifind-only (strict): Use iFind only, error if unavailableifind-fallback (default): iFind preferred, fallback to AkShareakshare-only: Skip iFind, use AkShare onlywind-only: Wind only, error if unavailablewind-fallback: Wind first, fallback to iFind → AkShare
