The Role Of Buyout Funds In M&A Transactions In China

In recent years, with the opening up of the relevant policies and the establishment of GEM, the private equity fund has expanded rapidly in our country, there has been an “universal private”boom. The data from Zero2 IPO Research Center shows that,in 2012 more than 18 billion US dollars have been raised. However, with the slowdown in the IPO market since 2012, more and more private equity firms are facing problems of investment exiting,fund-raising, even many institutions cannot sustain any longer. This phenomenon reveals the periodic problem in the development of China's private equity funds: Fund homogeneity, and concentrated in growth funds. Compared with the dominant pattern of buyout funds in developed financial markets,such as Europe and the US, China's private equity market still has a long way to go. The development of buyout funds in China accelerate gradually, which plays an increasingly important role in the market.According to the latest data of Zero2 IPO, in July 2015, the number of newly raised and newly established of the Chinese and foreign venture capital and private equity firms reached 101, among them 59 were newly raised funds, and 52 of which disclosed the raise, raising a total amount of $ 3.886 billion,and 42 were newly established, 26 of which disclosed the target size, planning to raise 15.782 billion.At present, most studies focuses on the development and market prospects of buyout funds, the research about the buyout fund's role in transaction level is rare. In this paper, we will analyse an actual case in-depth, with the use of public information of listed companies to analyze the role which buyout funds played in M&A transactions in China.The article is divided into five parts. The first part is an introduction, which describes the research background, significance and research content,and puts forward the shortage of this article. The second and the third part is tied introductory chapters, which introduces the development of domestic and foreign buyout funds and domestic and international M&A market.These two charpters pave the way for the fourth Chapter. The fourth part describes Zoomlion's acquisition of CIFA,analyse three buyout funds' s(Honey Capital, Goldman Sachs Group Inc., Mandarin Capital Fund) role in the transaction.Although the overall level of investment and scale of buyout fund in China's is still in the early stages of development, but with the rapid development of China's capital markets and increasingly sophisticated financial instruments, the importance of buyout funds play in the future of China's M&A transactions will be greatly improved.