M & A Research - M & A New Model: Management Buyouts

The essential of merger and acquisition is to gain enterprise control. It is to be explained and instructed in terms of enterprises goods and enterprise capital theory, efficiency theory, undervaluation theory, transaction theory and entrustment and procuratory theory. Enterprises seek maximization of profits through merger and acquisition.The world has experienced five large - scale merger and acquisition tides America amongst these tides. The fifth has been lasting and the following six distinguish features; unprecedented scale, frequent, rapid development, high-tech enterprise merger being in the ascendant, horizontal merger and acquisition of powerful industrial giants and strategic merger and acquisition, international wild development, the ascendant merger of high - tech enterprise, horizontal merger and acquisition of powerful industrial giants and the motivation of pursuing strategic target.Chinese enterprise have also experienced two tides of merger and acquisition. The second has been lasting from 1990's till today. After years of such hard scrabbling, merger is still dominated by the government. Financial merger still play an important roll. Generally the scale is small, and the main forms for merger and acquisition are by contracts. There is much diversity for foreign capital involvement The property reform is expected to be improved.From different point of view, the models of merger and acquisition can be divided into different types. Generally speaking, they can be divided into horizontal, vertical and synthesized Horizontal merger and acquisition.Managerial merger and acquisition is a kind of creative model of merger and acquisition originating operation abandonment and withdrawal. Management shows great interest in it because its development is convenient for ownership exchange. Its development has close relationship with risky investment and also links to privatization.The practice of managerial merger and acquisition has its own features and has progressive significance. But it also brings barriers for formation andoperations in its early stage. The fairness and justness for merger and acquisition price is to be evaluated. It will meet with challenges,such as restrict of capital and behaviors. The market for merger and acquisition is to be improved. The following five aspects are to be normalized:1. Clear goal for merger and acquisition;2. A effective way to get capital and clear - up;3. Fair and just price;4. Regular information release;5.'Issuing proper laws and regulations.Changsha Friendship and Apollo Group set a good example for small and middle size state-run enterprises in the field of capital and stock increase. It has the following six features, arise five results and gives us three kind of thinking:1. The best way to get capital for managerial merger and acquisition is through capital and stock increase;2. The key issue is to avoid lose of state-owned properties;3. Success lies in conformity after merger and acquisition.The proportion of shareholding in the management level is relatively low, organization structure of enterprises after merger and acquisition is week, Managers have too much power, Target Company is devalued. Therefore, we should do as follows:1. Proportion of shareholding should be paid attention to in the management level; two shareholders should be more prominent;2. Relevant laws and regulation should be studied and combined in the process of merger and acquisition;3. Managers should finance by themselves;4. The price should be based on Apollo so as to ensure the work for merger and acquisition in a fair and justice way.