Research On The Motivation,operation Mode And M&A Effect Of Company X To Set Up An M&A Fund

Under the dual institutional background of China’s economic transformation and financial supply side reform,how enterprises effectively integrate financial institutions and social capital to achieve high-quality development has become an important issue.The report of the 20th National Congress of the Communist Party of China pointed out that we should adhere to the purpose of providing financial services to the real economy,comprehensively deepen reform,improve the multi-level market system,improve the functions of the capital market,and increase the proportion of direct financing.In this context,the "listed company+PE" type M&A fund emerged in China’s M&A market,which is not only a localized model,but also a Financial innovation model,reflecting the integration of industry and finance.Its essence is to combine the strategic policies of listed companies with the professional capabilities of PE institutions,assist listed companies in investment and mergers and acquisitions activities,help enterprises expand market scale more quickly,and enhance company value.Therefore,although this model has not appeared for a long time,it has been applied by more and more listed companies.The topic of this article aims to further explore the unique "listed company+PE" M&A fund model in China,and attempt to explore its deeper theoretical and practical significance through case studies.The case of X Company establishing a merger and acquisition fund to acquire Urbaner is a typical case in recent years.This article takes this case as the research object,analyzes and summarizes the reasons for establishing a merger and acquisition fund,the operating mode,and the effects after the merger and acquisition.It is hoped that it can provide reference for other companies in China to choose to establish merger and acquisition funds to implement mergers and acquisitions.This paper is divided into six parts.The first part elaborates on the background and significance,literature review,and research methods.The establishment of a merger and acquisition fund will have an impact on corporate mergers and acquisitions.The second part introduces the relevant concepts and theories of merger and acquisition funds,and analyzes the mechanism of establishing merger and acquisition funds.The third part provides a detailed statement and sorting out of the background,transaction subjects,motivation,and process of X Company’s merger and acquisition.Based on the fact that this merger belongs to the "snake swallowing elephant" merger,in order to better achieve the merger,Company X has chosen to establish a merger and acquisition fund for the merger.The fourth part provides a detailed explanation of the reasons and operational models for establishing merger and acquisition funds,especially analyzing the operational models of merger and acquisition funds from four stages:establishment stage,fundraising arrangement,post investment management,and exit arrangement.Through case analysis,it was found that X Company’s merger and acquisition fund adopted the "listed company+controlling shareholder+PE" model for multi-structure financing,maximizing the role of equity leverage and debt leverage.The clever operation of the merger and acquisition fund helped X Company acquire Urbaner,achieving the completion of the so-called "snake swallowing elephant" merger and acquisition.The fifth part analyzes the effect of M&A,starting from two perspectives of M&A performance and risk.On the one hand,it uses event study,financial indicators and EVA to evaluate the M&A performance of X Company;On the other hand,analyze the risks.Based on the above research,the sixth part concludes that M&A funds play a positive role in corporate mergers and acquisitions,but there are also certain risks that need to be strengthened for prevention.Overall,its financing effect is obvious,and this model uses multiple interests to balance and prevent risks.At the same time,it provides inspiration for other companies to use M&A funds for mergers and acquisitions from the perspectives of listed companies and regulatory authorities.On the one hand,listed companies should choose merger and acquisition funds based on their own strategies,avoid blindly following the trend,and focus on post merger integration.On the other hand,relevant regulatory agencies should strengthen the management mechanism of merger and acquisition funds.The research in this paper will help improve the development of M&A funds in China’s M&A market,and also provide reference for enterprises to use M&A funds.