Research On Motivation And Economic Consequences Of The Equity Carving-out Of Levima

Since the 1980 s,foreign enterprises have been exploring the development path of diversified operation.Cross-industry operation not only allows enterprises to tap profit growth points from new fields,but also resists unknown risks in the industry to a certain extent.However,with the expansion of the scale of the development of each business,the company’s own management capabilities and cash flow began to be difficult to maintain the operation of the major businesses simultaneously.So in the 1990 s,developed countries began to try the restructuring method of carve-out and listing.Make it more independent in the market by listing the subsidiary.As a result,the enterprise can obtain resources from the outside to a greater extent,and the management team of the subsidiary can also plan a more appropriate investment and financing strategy.The parent company can also achieve better diversification while retaining control.China’s capital market started late,and the application of carve-out and listing also lags behind.This is because the previous carve-out and listing system was not perfect,and the domestic capital market environment and regulatory system were not mature.With the improvement of the system in the past 20 years,the case of carve-out and listing has only appeared in my country.Compared with foreign markets,the domestic attitude towards carveout and listing is stricter.In order to facilitate supervision and prevent non-compliant behaviors such as the transfer of interests between enterprises,the country has long not allowed A-share listed companies to spin off their subsidiaries to list on A-shares.The existing cases are mainly H-share carve-out to A-share listing.With the rapid increase in the size of the domestic capital market,more and more companies need to improve their operations through carve-out and listing.For companies with carve-out and listing plans,the experience of successful carve-out cases in the past is very important,so research in the field of carve-out and listing is of great significance.This article selects the case of Legend Holdings’ carve-out of Levima for A-share listing.Legend Holdings is a typical diversified enterprise,and Levima is also representative among outstanding high-tech enterprises.Combined with the current academic views on carve-out and listing,this paper mainly discusses the case study from the perspective of motivation and economic consequences.First of all,in addition to summarizing the current scholars’ views on the motivation and economic consequences of carve-out and listing,the relevant concepts of carve-out and listing and the enterprise management theory involved in this case are also explained.After the theoretical foreshadowing is established,a comprehensive analysis of the case should be carried out,not only to study the behavior of enterprises in the process of carveout and listing,but also to excavate the implicit corporate motives and enterprise value management paths behind the carve-out and listing.Finally,it is necessary to analyze the economic consequences of the carve-out and listing.Through the case study,this paper summarizes the relevant conclusions of the case,and draws out the enlightenment brought by the case.The conclusions of this study are the following points.First,a carve-out listing is conducive to the valuation of the parent company and can bring excess returns to shareholders.Second,the carve-out and listing provided support for the subsidiary’s horizontal product expansion and vertical industry expansion.Third,carve-out and listing can greatly enhance the independence of subsidiaries,which is conducive to the common development of parent-subsidiary enterprises.In addition,this paper draws three inspirations from the case study.First of all,diversified group companies should give priority to high-quality assets with long-term development potential for carve-out and listing.Secondly,enterprises should make clear market positioning and industrial chain planning based on long-term development goals before carve-out and listing.Finally,in addition to pursuing profit growth after carve-out and listing,companies also need to focus on improving their asset management levels.