Planning for Cross-Border M&A of “Mono-tax” company

Since target companies have different tax benefits in different organizational forms that influence after-tax costs and deductible-tax interest in both parties of mergers and acquisitions (M&A). Under the premise of taking into account the interests of both parties, through comparative analysis, analyses three kinds of M&A program on Target Company in two different organization, the analysis found that under comparable conditions are basically the same premise, taxable M&A “double taxation” company is not as good as taxable M&A “Mono-tax” company; when taxable M&A is “Mono-tax” company, ensure the program that after-tax income of Target Company shareholders is no difference is the optimal solution of M&A side, its after-tax acquisition costs is lowest; but ensure the program that after-tax cost of acquiring party is no difference is also the optimal solution of the Target Company shareholders, and its after-tax income is highest. Balance the interest of both sides of M&A, the two sides can determine adjustment interval in an appropriate increase or reduce M&A price, in this range, the two sides can achieve mutual benefit in M&A transactions.