The Research On M&A Financial Channel Of Enterprise

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 efficiently. 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.Compared with western countries, the number of M&A financing methods used by Chinese enterprises is very limited, with many advanced methods still left untapped. Therefore, under the restriction of less developed capital market, those enterprises embarking on M&A should seek together with financial supervision authorities the development and innovation of present M&A financing methods considering our country's conditions. They should control M&A financing risk reasonably to ensure that the M&A project be successfully carried out.Firstly, this paper studies the financing theories of each periods in the West, including Net Income Approach, Net Operating Income Approach and traditional theory, MM theory, Tradeoff Theory, Pecking Order Theory, Control Theory. Then, this paper concludes every financing channel and analysts the advantages and disadvantages of each kind of financing channels. Then aiming at the current situation of the weak internal financing ability, having partiality for equity financing, disliking debt financing, and financing channel simplex, this paper deeply analyze the inherent reasons in law, investment bank, institutional investor, investor's quality, government factors. Finally, Aimed at above-mentioned problems arid the reason analysis, we should adopt the following strategies to development China's M&A financing markets: on the one hand, we should relax the finance control and support and develop institutional investors and investment bank; on the other hand, develop merger and acquisition financed by exchanging stock and LBO, while encouraging derivatives such as convertible bond, stock option to use. And what's more important, we must develop positively some new financing channels such as take fully advantage of trust, set up M&A funds.etc to promote the development of merger and acquisition activities.