Abstract
Listed company reduce its capital and make private placement to introduce strategic investors and restructure its shareholders equity； Strategic investors had the listed company merge the unlisted company by insuring new shares of stocks after acquiring the control of the listed company. On the legal forms, acquiring company is the dominate unite, the acquired company is passive unite；Economic substance is the merged company and its operation is controlled by the shareholders of the unlisted company, this type for mergers and acquisitions in the reverse merger (Reverse-Acquisition). To archive the mergers and acquisitions objective of making a backdoor listing, the following conditions are provided to be considered: 1.The enterprise which cause operating loss continues and loss the competitive advantage. 2. The enterprise which its shareholders and managements structure are uncomplicated so that shareholders and managements are not hard to exit the company, and make the post integration easy. 3. The enterprise which was not settled up for a long time so that pay removal costs less. 4. Considered in advance if match the merger approval conditions that required by the competent authority and subsequent continued listing requirements identified. Private placement is an important way to change capital structure for the purpose of merge and acquisitions, it not only quickly make economic way of acquiring long-term fund,but also is thestrategy way of getting industry alliances to expand the competitive advantage. In order to avoid private placement abuse to hurt small shareholders' interests, the governance authorities make placees qualification limit shrinkage, price regulations and private transfer limit.