A Study On Management Buy-Outs In China

Management Buy-Outs (MBO), as an institutional innovation of M&A ways, has got the quick development in the west nation nearly years. Some MBO cases start to emerge in china .It maybe become a main means that reform the structure of the Chinese enterprise ownership in the coming future.This text tries to judge whether it has or not the soil of suiting its development in China by detailed analyzing basic characteristic and theoretical foundation of MBO. Compares the difference of MBO happened in western countries and china, finds out the defections or problems existing in our country's MBO cases and brings up the corresponding proposals. I hope that theory study and practice will be helpful to the future.Chapter one elaborates the aim of the topics and the cause why picks up the topic, Introduces the structure and research methods of article, then briefly reviews the related documents on MBO.Chapter two gives brief introduction of its basic characteristic and reasons why appear the action. Immediately looks backed the history of western national MBO development. Finally, carefully analyzes the theoretical basis.Why will the trade proceed successfully between the both parties (seller and buyer). The reasons consist in: 1 .what the seller favors is the short-term benefit but the buyer favors is the long-term benefit of the company and MBO is a kind not-zero games to a large extent that will benefit to the both .2.Information dissymmetry exists in the both and results in the disagreement of the expectation on the future value of the company. At last the trade can be realized.With the coming of knowledge-based economy age, the manpower capital is playing a more and more important role. The creating ability of entrepreneurs and vocational managers decide the number the company wealth.MBO is a tool that can optimize the management construction of company, decreases the agency cost, promotes the improvement of management and change the irrational encouraging mechanism. The companies' organizing cost composes of twoparts: one is agency cost that be resulted in the target inconformity among these people who have the right to make the decision. Two is the cost lack of enough information. The rational deciding construction can make the minimum of organizing cost. In fact MBO corrects the defection causable of the excessive agency cost.Chapter three describes the current situation and background of carrying out MBO in china and gives the possibility analysis. From these happened MBO cases, finds out the traits of Chinese MBO and compares with the western MBO. we can draw a conclusion that the Chinese MBO still places in the early stage and there is a very long road to go.The report inside the tenth five-years plan outline clear and definitely points out: "nation must has enough share-ownership and control these important business related to the vein of the national economy life and national security. As to the other businesses, government needn't hold the controlling right of share. " This is to say, except these enterprises which have relation to the vein of national economy life and national security, the other can adopt diverse holding share ownership ways to change the original system and the right of the stated-owner share can partly or all withdraws from formally position. The government provides a powerful policy support and offers a good development opportunity.The state-owned enterprise exist in some problems such as the property right is blurry and the final and true owner of property right don't exist. In the same time, there are some defections and problems in some listed companies. All suggests MBO will have a good future.There are two kinds of background in the form of domestic MBO: the first is run by the starter and its team of private and collective enterprise with the reform going deep. They request the clear structure of property right AND get rid of" red hat" and become the real owner. The second is built up in the situation that state-owner capital withdraws from these...