Research Of Merger&Acquisition Exit Mechanism For Private Equity Investment In China

The current main exit mechanisms of private equity investment in Chinainvolve the following approaches: IPO, M&A, Trade-sale, Buy-back andLiquidation. IPO approach is the most preferable exit mechanism fordomestic private equity investment funds, mainly due to its high return ofinvestment. Yet IPO market was suspended in recent years, the majority ofdomestic investment funds were facing with severe difficulty for IPO exitmechanism. Under this circumstance, M&A exit mechanism has rapidgrowth since2003and attracted close attention from domestic private equityfunds. M&A exit mechanism still owns tremendous potential for futuredevelopment of exit market in China and will become one of the main-streamexit channels for domestic private equity funds.This thesis analyzed the exit mechanism for private equity investment inChina, especially under the current exit environment. This thesis contains thefollowing five parts: Part One, discuss the status quo of domestic privateequity industry development and exit environment, the main purpose is toraise the necessity of research on M&A exit; in Part Two, conduct thecomparison analysis of both domestic and overseas exit mechanisms; PartThree, focus on the research of M&A exit mechanism, including the pros andcons analysis of M&A exit mechanism; Part Four, study some typical M&A exit cases in China, including the case of Guigu Tiantang exit from Steyr, andthe case of Huizhi VC exit from KLK; Part Five, summarize the finalresearch conclusions and propose advices to improve current exit practices ofdomestic private equity funds. This thesis aims to provide substantialreference for domestic private equity fund to conduct best exit practicesthrough the study of M&A exit mechanism.