The Research On The Financing Strategy Of Leveraged Buyout

With the development of China’s capital market,the merger and acquisition activities between enterprises have been increasing recently.In this process,there has been a new way of merger and acquisition.Leveraged buyout not only solves the huge financing needs of mergers and acquisitions,but also creates special shareholder value by improving corporate governance structure,reducing agency costs and improving capital operation efficiency.Choosing the appropriate financing strategy is the most important part.Leveraged buyout uses debt capital as the main financing tool,uses financial leverage to increase the debt ratio,and raises the main funds with less own funds to acquire and restructure.The special financing structure has unique high leverage,high risk,high income and high technical characteristics.The financing strategy of leveraged buyout includes the determination of financing demand,the analysis of financing cost,the choice of financing mode and the optimum financing structure.When choosing the financing strategy of leveraged buyout,the enterprise should consider the combination of the financing strategies that minimize the financing cost and minimize the risk,and maximize the financing return.Finally,I analyze the Guangming group purchase weetabix case and combined with the reality of our country,points out that the leveraged buyout the advantage of financing in our country and constraints and puts forward related suggestions,summarize the problems and research direction.