Studies On Corporate M&A Financing Of China

There are a number of different ways of financing in corporate M&A activities. Based on its own capital structure, the acquiring company should choose the most appropriate method to maximize its benefit, i.e. achieving sufficient control over the target company at the lowest cost. Otherwise, the acquirer will probably be burdened with financial liabilities, which at worst may bring negative impact on the acquirer's normal business operations; so the acquirer must attach much importance to the choice of an appropriate financing method. The first part of the dissertation provides a general description of corporate M&A processes and an analysis on the common financing methods available to practitioners. Among which, senior debt and subordinated debt issuing are first explained as the examples of debt financing. In the category of equity financing, focus is given to share offer and share exchange. For the hybrid type, the concepts of convertible bond and warrant are discussed. Apart from the above mentioned common ways, special financing methods such as leverage financing and seller's financing are also covered. Meanwhile, the macroscopical background of M&A financing is also a significant factor considered in this part.In the second part, the prevailing methods of M&A financing in China are presented, particularly in the forms of share offer, share exchange, leverage financing and seller's financing. Based on it, comparison is made on M&A financing structures between Chinese and Western companies. M&A financing planning is then studied and real-world cases are used to demonstrate the effects on the companies' financial status due to such planning.The influencing factors of M&A financing are discussed in the third part, including the quantity of M&A financing, financing costs and the process of selecting a proper financing method. Furthermore, microcosmic analyses are done aiming at the effects of M&A financing on companies' financial status in this part. In the last part, discussion is carried out regarding the future of equity financing and convertible bond financing, as well as innovative financing channels and other corporate finance issues relating to M&A transactions. The conclusion is that, at present, there is a big possibility to M&A financing by new share offer and placement, private issue is also regarded as with large potential, and developing a convertible bond market is of great importance for M&A in China. M&A loans, M&A funds and M&Afinancing through affiance will expand channels to facilitate corporate M&A activities for Chinese companies.