The Effect Of Buyout Fund In Corporation Merger

As the domestic mergers and acquisitions market is becoming increasingly fierce, more and more companies choose merging as their effective way of the integration of market resources andseizing market share and improving the competence. Buyout Fund which is a efficient intermediary of solving merging problems, can guarantee the successful completion of company merging. It can also play an important role with participating in the whole process of the company merger in order to increase the value of mergers and acquisitions. This paper introduces the history and current situation of Buyout Fund in China and analyse the operation mode of Buyout Fund.The paper analyzes the mechanism of action of Buyout Fund has made on the merge process. Before the deal, Buyout Fund can help to solve the financial problems. On one hand, Buyout Fund has professional operating capability and mature capital operation ability, and rich industry resources. In this way, Buyout Fund helps to get accumulation of brand effect, and make the investors gain enough confidence. On the other hand, Buyout Fund can make big use of the accumulated professional resources, in order to help the company get funds according to different stages. In this way, it can reduce the fund raise pressure and make big use of it. Beyond that, Buyout Fund helps to seize the right merge time.It can use the industry resource to find the merge target that has the undervalued possibility. So it can help the company set the merge goals in the first time. In this way, the pressure of paying has been reduced. During the merge process, Buyout Fund help the company to have a reasonable design of transaction and payment. After the deal, Buyout Fund takes part in the merger process as the mature financial institution, it can reduce the merge risk. In spite of this, Buyout Fund pay attention to the resource integration management, and it can also improve the governance structure to optimize the management mode, in order to achieve synergies.In the end of the article, I choose two cases to explain the function of value improvement that has happened in three phases which is before the merger, during the merger and after the merger. One of the case is Jiangyin Zhongnan Heavy Industries Co., Ltd. merging Brilliant Media Co., Ltd..This case is a classical case that has happened during this time. This case also involves the popular cultural industries. The Buyout Fund helps to make a successful implementation although it encounters many problems.But the case happened in 2014 which means the data of performance indicator after the deal can not be gained. In spite of this, domestic Buyout Fund neglects the resource integration management which is very important. So this paper has introduce the other case -- Xinqiao investment company merging Shenzhen Development Bank. The first case analyses the effect that Buyout Fund has make before the merger. It helps to solve the financing constraints, and provides a reasonable deal for the company with a reasonable pay. Buyout Fund assists them complete the merger successfully. In the second case, Xinqiao investment company helps Shenzhen Development Bank complete the integration and management of its asset. It will finally help the bank gain the synergistic effect. This paper wants to Provide reference to the further development of Buyout Fund in China.