The Role Of Investment Banks In Mergers And Acquisitions, Problems And Countermeasures

This paper is focused on the study of functions and problems of Chinese investment banks in M&A activities; meanwhile, some suggestions on policies are put forwarded. Basing on positive analysis, the development of Chinese M&A market is demonstrated and its characteristics and existing problems are pointed out in the paper. As the chief and in the most important financial institution in stock market, investment banks can play a very essential part in M&A activities. Practices of modem economy have shown that, through expanding the business of investment bank in M&A, the existing resources in economic structure could be transferred and recombined to expand or enlarge assets scale more rapidly and more efficiently, therefore, collocation of assets structure can be optimized. So, investment banks?participation in M&A will bring direct and keen effect on current enterprise reform and reconstruction in China. Results of the study shows, in China, the role of investment banks in M&A business is only in three parts: 1) Helping enterprises to choose the mode of merger, as financial consultant. 2) Merger pricing. 3) Choosing the mode of payment in M&A. The study also shows that, in M&A market, investment banks haven抰 actively participated into it until now. Further more, investment banks show few positive factors in M&A service and their service qualities are low. Focusing on this problem, 5 main reasons are thoroughly analyzed. In order to solve this problem, and to develop investment banks?business in M&A market, 7 countermeasures are put forwarded, which will be benefit to improve the situation of current stock exchanges companies in M&A business.