A Study On The Strategy Optimization Of Financing On Merger And Acquisition

M&A is the most common kind of way in the capital operation of a corporation, which can realize the expanding of a corporation at a high speed with the low cost effiently. This is exactly unique glamour of M&A. And this is the important reason for the fifth M&A climax coming into being. Today , the M&A scale, which become larger and larger, is a costly project because of related to a large amount of capital transferring. It is too hard to accomplish M&A, if there are not enough financing. So, it isn't a overstating saying at all that financing is a key step of M&A.In 1984, BaoDing textile machinery manufacturer purchaseded BaoDing knitting apparatus manufacturer by undertaking its debt. This is the earliest case of M&A in our country. From then on, M&A has got rapid development. M&A scale has increased 70% every year since 1998. And now, M&A market of our country becomes the third largest market in Asia. Even so, compared with developed country, the block of the financing channel has seriously restricted the function of M&A which can promot enterprise fast-developing, because of the unripe capital market and he imperfect financial system. In such a case, it has realistic meaning to study the western financing theory, use its advanced experience for reference, analys the current situation of our M&A financing and origin cause of formation and table some proposals pointedly.Firstly, study the financing theories of each periods in the West, this paper think that Net Income Approach, Net Operating Income Approach and traditional theory lack scientific mathematics deriving and statistical analysis. Though it has played a important push role to development of financing stucture optimized theory by introduce mathematics deriving, MM theorem only consider the tax shield effect of interest, while ignoring that debt issue can aggravate the financial risk of the company, and produce the bankrupt cost and agency cost. Tradeoff Theory is relatively perfect and closer to reality, due to consider both interest and cost caused by the debt. Pecking Order Theory, Contractual Theory and Control Theory study financing strcuture optimize by Separately emphasize particularly on information, cost and ownership of assets, and become mainstream theory. At present, most scholar of our country research based on these three kinds theorys.Secondly, this paper analyse the advantages and disadvantages of each kind of financing theory, and compared the current situation of financing channel choosing in our country and in developed country. And, this paper point out that the firms in developed country have various financing channel, and financing tools, and debt financing more than equity financing, and begin to use one-stop shopping. On the other hand, due to the reasons in many aspects, the firms in our country have few financing channels to choose for M&A, and concentrate on the loan and the stock financing mainly. Furhtermore, the financing tools are very underdeveloped in our country.Thirdly, based on drawn lessons from Pecking Order Theory, Contractual Theory and Control Theory, this paper build a M&A financing channel choosing model which regard enterprise value maximize as the goal. According to the model, the merger firms can choose the best financing channel from equity financing, debt financing and internal financing, and define the optimum financing scale, after estimating the output ability of the new enterprise after merger. Besides, this text emphasize that merger firms shuld also cnsider the financing cost, and introduce WACC analysis.Finally, aiming at the current situation of the weak internal financing ability, having partiality for equity financing and loan, disliking debt financing, and financing channel simplex, this paper deeply analyze the inherent reasons in market factors, financing tools, the agency organization, policy factors. Then, this paper propose that our country shuld use innovative financing channels and tools in west for reference, as Convertible Security, Note Issuance Facilities and M&A foun...