Case playback:

　　A company is China's largest alumina, primary aluminum and aluminum products manufacturers, high alumina producer, third largest primary aluminum producer in the world second. B company is the world's third largest diversified Mineral Resources Ltd, but by the financial crisis the debt pressure surge. In 2009 February, both sides confirmed negotiations cooperation matters, and foreign jointly announced the signing of a strategic cooperation agreement. A will share B's iron ore, copper, aluminum assets, and the subscription B convertible bonds issued by the company. If the transaction completed, A will hold 18% stake in B, and to B the board of directors of the company sent two members of the board of directors. After the announcement caused a strong reaction immediately in the B investors, some investors require participation in allotment of rights. As the economy recovers, the rise in commodity prices, the market has changed the situation. In 2009 June, B's board of directors transaction cancellation of bilateral strategic cooperation, also decided to implement the planned rights issue, and in accordance with the agreement to the A company to pay 1% of the liquidated damages.

　　Intensive analysis:

　　Because of the information asymmetry, moral hazard, "covert project" and the legal policy, the implementation of M & A always involves substantial risks and pitfalls. M & a contract is not only embodies the merging parties rights, obligations, and M & A is based important safeguard against all kinds of known and unknown risks to the successful completion of. Due to the lack of legal awareness, many enterprises of our country security interests in the construction of prevention mechanism, rely on the contract, reducing the economic responsibility is still lagging behind, leading to the occurrence of keep the M & a failure rate and some M & a "massacre".

　　In this case, B company by the debt crisis, for A company, A company is negotiating advantage. But the A companies in the management failed to recognize the big western resources, government and the general public, including shareholders, for Chinese large-scale overseas resource concerns, possibility of improvement and market situation. In the signing of the contract process, to B company for too long time and too easily liquidated damages, lost power and control the power of the situation development, resulting in great efforts to draw water with a bamboo basket.

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