Research on the restructuring of overcapacity in the energy and high-consumption industries considering mergers and acquisitions

LIANG Zhuang; WU Jiahao; ZHU Lei

Abstract：In recent years,China has achieved significant results in supply-side structural reforms,successfully eliminating a large amount of backward production capacity.However,the problem of overcapacity still exists in high-consumption industries,such as the steel industry.As the domestic economy enters a new normal,with a continuous decline in demand for these industries,how to effectively restructure enterprises within the industry becomes a matter of concern.This study employs real options and game modeling methods to explore the strategic choices of enterprises in typical high-consumption industries when facing acquisition and exit decisions.Starting with homogeneous enterprises,we examine the decision-making patterns of enterprises under market downturn conditions.Furthermore,by introducing heterogeneous production and exit costs,we discuss the strategic behavior of enterprise integration under the assumption of heterogeneity.Numerical simulation experiments show that in industries with overcapacity,acquisition behavior in a duopolistic market has a significant market structure transformative nature,where the feasible acquisition interval continues until the acquired company reaches the exit threshold.At this stage,both the acquiring and the acquired companies exhibit a strong tendency to engage in acquisitions earlier.For the acquiring company,an earlier acquisition timing means that market monopoly can be achieved more quickly,thereby increasing the potential value of the acquisition;for the acquired company,being acquired earlier means obtaining more cash flow when facing market exit pressure.