Research On The Problem Of Leveraged Acquisition In China 's M & A

Leveraged buyout is a special pattern in company takeover. Its essence lies in thecapital market debt acquiring company, namely to borrow money from banks orinvestors to finance the acquisition target enterprise, committed to the acquisition andreorganization of enterprises future cash flow and profit to repay their debts. Mergersand acquisitions give higher efficiency small enterprises to use pivot lever mergers oflarge enterprises, like "the snake swallows an elephant".Leveraged buyout prevailed in the80’s of the twentieth Century, which greatlyactivated the capital market of America, provided a continuously moving force to theprosperity and development of American economy. At present, speeding up theadjustment of economic structure, improving the national enterprises and industrialcompetitiveness, which China’s economic growth is the urgent needed, also is one ofthe important strategic tasks in China’s "Twelfth Five Year Plan". In order to improvethe sustainable competitiveness of our enterprises and industrial enterprises, only byself accumulation is not enough, the key depends on the power of the market topromote. Along with the completion of the share reform of our country’s state-ownedlisting corporation, the formation of the improvement of financial market and the fullcirculation market, more and more leveraged buyouts happened in China’s capitalmarket. But, for now, the financing environment in China is not perfect, the reform ofcorporate governance faces arduous task, so the research of leveraged buyouts hasimportant realistic significance.This paper firstly introduces the related concepts and characteristics of leveragedbuyout, view the background of leveraged buyouts, make us have certainunderstanding from the theory of leveraged buyouts; then, the leveraged buyoutspecific practice at home and abroad are analyzed, and discusses the implementationof leveraged buyouts in China conditions which are slowly mature; finally, analysisthe existing problems of Chinese leverage acquisition, and puts forwardcorresponding countermeasures and suggestions.