Financing Mergers And Acquisitions By Private Enterprises In China

It is an extrude phenomenon that an enterprise becomes a tremendous one by purchasing its competing opponent, and every gigantic firm has grown up by M&A. Our private-owned enterprises are being on special time: on the one hand, our state-owned enterprises are adjusting that its will retreat from competed field. The private-owned firm will enter the field by incorporating other firms; on the other hand, our country entering into WTO in 2001, the private-owned incorporation needs scale-up for receiving the furious competing of coming from domestic market and international market. This paper is to enclose the subject of the financing method of the private-owned enterprise. The paper analyses the reasons of the financing difficult. On the basis of the analyze, it puts forward the advise of solving the problem, then the article put up the innovation for widening the financing channel.This paper, first of all, narrates the financing actuality of private-owned enterprises recombining action, and open out the existent problem. Then the article, according to the analyze of the proceeding next, expatiates the deeply reasons when the firm is being financing for mergers: the private-owned enterprises are no credit standing, result in the action of provide a little loan; it exist the phenomenon of information asymmetry between the private-owned firm and the commercial banks, and result in the phenomenon of credit admeasure; the different judge of the cost of directly financing arouses the phenomenon of converse select on the negotiable securities market. In the last part, the paper puts forward the financing innovation method on the basis of the proceeding two chapters.