The author believes that the most difficult problem is integration.

First, the general concept of enterprise mergers and acquisitions

Mergers and acquisitions (M&A) integration refers to the adjustment and transformation of human resources, organizational structure, corporate culture, and strategic management between the acquiring and acquired parties. Key areas include: (1) cultural integration; (2) business strategy integration; (3) financial integration; (4) human resource integration. According to a global M&A research report, the failure rate at different stages varies—30% before and 17% during M&A, but as high as 53% in the post-merger integration phase. This shows that many M&A deals fail to create real value due to poor integration, which is often a weak link in practice.

Second, the current construction machinery industry debt-to-equity integration has its own characteristics

In the current form of debt-to-equity swaps, capital injection for agents is common among manufacturers. However, re-finding new agents may not be better than maintaining existing ones, as market risks are high, and debts could turn into bad debts. Integration without long-term preparation may lack the necessary will and coordination. Manufacturers often lack experience in integrating agents, and the agency model has long dominated the market. Most manufacturers never considered becoming shareholders, leading to a lack of talent, management skills, and awareness for integration.

Third, where is the debt-to-equity integration agent difficult?

1. Agents’ management is often unstandardized, requiring long-term operational coordination. Many agents started as self-employed individuals, with chaotic internal structures and financial systems. Manufacturers face significant challenges in entering such environments. 2. Cultural integration is another challenge, as corporate culture reflects values and behaviors that may clash. 3. Financial data is often unclear, making it hard to establish a standardized system. 4. Controlling improper transactions is also difficult for small shareholders.

Fourth, the author's practical advice on integration

Based on experience, the author recommends: 1. Embrace the agent’s culture rather than force change. 2. Develop a clear company charter to protect minority rights. 3. Form a working group with third-party experts. 4. Hire independent directors to ensure fairness and oversight. These steps help address integration challenges and improve the chances of successful M&A outcomes.