CNAC bitter after China Eastern Airlines: are global merger wave of blame

At present, China's civil aviation enterprises competition structure and strength has not reached the ideal State, must, through merger and to enhance the core competitiveness, industry restructuring is the trend

According to the world brand laboratory http://brand./report: European and American Aviation Enterprise was after several mergers, acquisitions and restructuring forming giants. accompanied by deregulation and the sky opened up-trend continues to strengthen, China's civil aviation enterprises are facing the international competition will become more and more fierce. In front of the wave of international capital operation, opportunities and challenges, China Civil Aviation Enterprise should be prepared in all its aspects, practicing good internal strength to better participate in international capital operation.

When China's aviation enterprises in China under the sky of a curtain of "fighting" mergers and acquisitions, let us look at the current global merger wave characteristics and trends that will bring us to enlightenment.

The fifth wave of mergers and acquisitions and the formation of trend

The fifth wave of mergers is not accidental, it is essentially global integration deepens, the rapid development of science and technology, capital markets, international competition brought on by a cross-border restructuring and structural adjustment, in turn, promote scientific and technological progress, globalisation, capital market development. As Shi Stigler describes, the annexation movement could be called the "international monopoly and mergers".

World economic integration, promote the company's mergers and acquisitions

The current trend of economic globalization, the growing trade between countries is becoming more and more frequently, which makes the whole world is becoming an open market, enterprises face the broader market space, and also from international competition is becoming more and more fierce. Business conduct through the merger between alliances, have complementary advantages, is the global strategic objective of a shortcut. Especially in Europe, at this late stage of the wave of mergers and acquisitions, cross-border mergers and acquisitions growth rate has exceeded the North America. This is because in the face of the United States enterprises international competition, European companies must continue to enhance their market competitiveness, otherwise it will be the wave of globalization.

The Government to abolish restrictions on the kinds of policies to promote the company's mergers and acquisitions

Enter since the 1990s, as the global economy, enterprises face growing international competition. Based on this, the national monopoly policy has to relax. In the current merger wave, many countries were cancelled on international FDI, therefore, international investors in other countries have encountered obstacles and limits clearly reduced, allowing more easy cross-border mergers and acquisitions. In addition, some Government also abolished restrictions on some of the industry, makes present the industrialized countries have full liberalization in services, especially in banking, insurance and telecommunications industries, thus facilitating the industry mergers and acquisitions activity, changed the country's economic structure. For example, the United States Government in the 1990s to actively promote and other countries of the "open skies" agreement, greatly facilitated civil aviation enterprises in international competition in the market.

Scientific and technological progress to advance the company's mergers and acquisitions

The rapid development of science and technology to national economy brought high profits, the stimulation of international capital flows, also increases the transnational enterprises in other countries choose factory production or establish commercial marketing network for free. At the same time, network technology and the rapid development of communications technology, organization and management of the enterprise brings changes, making the growing trend towards a flat organization, thus more conducive to the development of enterprise information communication and delivery. In addition, the establishment of the global procurement system improves the efficiency of the management of enterprises, enterprises of mergers and acquisitions.

International capital market strength for merger provided the conditions

Corporate mergers and acquisitions is a capital operation, you must resort to good capital market to complete. Developed capital markets can provide financing sums of channel. In the current merger wave, the role of capital markets should not be underestimated. Especially after the Asian financial crisis, foreign capital inflows and low interest rates further contribute to United States stock market rise. Good financing environment has attracted a lot of foreign enterprises to United States listing, making equity financing as the merger of a large features. The 1998 United States foreign acquisitions projects although only 1/5 convertible taken, but its amount is more than 2/3. All this is effectively promoted in the global context of mergers and acquisitions.

On the implications of China's civil aviation enterprises

Since 2002, the restructuring of civil aviation of China, the China civil aviation enterprises of the competitive situation of the basic formation, competitiveness is also being constantly enhanced. But its competitiveness on the international market is still relatively weak, and unable to communicate with some big airlines abroad to contend with. As globalisation and deregulation by continuously strengthening our economy is bound to the mainstream of integration into the world economy, China's civil aviation enterprises will be faced with the enormous challenges of international competition.

At present, China's civil aviation enterprises competition structure and strength has not reached the ideal State, must, through merger and to enhance the core competitiveness, industry reorganization is inevitable. Global merger wave to the Chinese civil aviation enterprises with very good opportunities and inspiration. China civil aviation enterprises should firmly seize this opportunity, and constantly adjust the strategic direction, at the appropriate time selection and reorganization in order to better respond to international competition. Clear its own development strategy, carefully chosen and acquisition opportunities

In the globalization of the merger, the Chinese civil aviation enterprises also will usher in a new restructuring. To the "market" in existence, it must play a synergic effect, scale and network advantages for themselves the "spell" out of the way. 2002 Chinese civil aviation industry's first reorganization created today Air China, China Southern, China Eastern Airlines tripod. And internationally strong airline at more than a thousand aircraft fleet size compared to the three routes in terms of qualification, route network layout or management level, there is a long way to go. This is in the United States is particularly evident in the open air. But relative to foreign countries, China's capital market is not yet mature, financing methods compare single, laws and regulations are not

Very sound.

In such circumstances, should carefully select and purchase the opportunity to recognize their position. Air China should further strengthen the integration of the Cathay Pacific, taking full advantage of Cathay Pacific airline advantage, making the Air China International domestic routes converge and smooth, thus more competitive. China Eastern Airlines and China Southern Airlines should be reinforced base and at the same time in the merger wave to identify their future direction. For local and private airlines, continues to expand the scale of the enterprise to effectively integrate, or as a complement to other airline market, achieving market stratification competition to enterprise of high efficiency.