A Case Study Of Mulinsen's Cross-border Merger And Acquisition Of Landvance

In recent years,with the implementation of“One Belt and One Road”global initiative,Chinese companies have been enthusiastic about going abroad for mergers and acquisitions.Lack of experience and difficulties in later integration have led to the failure of M & A transactions.Low success rate is the biggest problem encountered by Chinese enterprises in cross-border mergers and acquisitions,and the appropriate cross-border mergers and acquisitions scheme is the key to determining the success of the transaction.Under these circumstances,M & A funds have entered the arena of cross-border M & A transactions as a financial instrument.At present,the main mode of cooperation for domestic M & A funds is that listed companies and private equity institutions set up "listed companies + PE" M & A funds to participate in M & A transactions,which is an innovation of traditional cross-border methods.The "listed company + PE" M & A fund will enhance the ability of listed companies to raise funds in cross-border mergers and acquisitions,effectively control the risks of mergers and acquisitions,and assist Chinese companies to increase the success rate.This model will have broader development potential in the future cross-border mergers and acquisitions.Listed company Mu Linsen is assisted by a "listed company + PE" M & A fund to complete a small and extensive cross-border merger and acquisition case.Since its inception in 2011,"listed company + PE" M & A funds have been widely used in domestic M & A,which provides practical ideas for cross-border mergers and acquisitions by Chinese companies.In the cross-border mergers and acquisitions due to lack of cross-border mergers and acquisitions experience and the difficulties of funding pressure,Mu Linsen chose to set up a "listed company + PE" merger and acquisition fund with a private equity institution,adopt a limited partnership to form a community of interest with PE institutions,and use the merger and acquisition fund to fund The fund raising has achieved the purpose of less capital investment,but the target is locked in advance.Then set up a double-layer SPV structure to isolate risks while avoiding supervision while investing overseas,and use "internal insurance and external loans" to achieve capital outbound and control exchange rate risks;finally,complete the injection of the target by exchanging shares with M & A funds.Much of the credit for this series of capital operations is due to private equity institutions.The "listed company + PE" M & A fund model has brought some positive effects to Mu Linsen:(1)financing effects,the financing advantages of M & A funds quickly met Mu Linsen's financing needs,seized the opportunity of mergers and acquisitions,and realized leveraged acquisitions.(2)Risk control effect.Through PE professional cross-border M & A services,it effectively controlled various risks in the process of cross-border transactions,and had no impact on the control of its major shareholders.(3)Other effects.The ingenious SPV of M & A funds has helped listed companies improve the layout of the industrial chain and increase corporate value.It is worth mentioning that there are also some problems and deficiencies in the use of Mulinsen M & A funds: first,insufficient information disclosure during the entire M & A transaction process;second,IDG,as an internationally renowned dual currency fund,According to the disclosure,it was found that in this M & A financing,it did not effectively take advantage of overseas financing,and the financing channels of M & A funds were still limited to domestic.Furthermore,Mullinsen's M & A targets generated a large amount of financial costs,and the overall solvency declined.Liquidity risk.Based on the above-mentioned shortcomings,some suggestions are put forward at the cross-border application level and the regulatory level of M & A funds.At the cross-border application level of M & A funds,design and optimize based on the transaction structure and financing strategy of this case.In terms of transaction structure,domestically introduced government-guided funds and overseasly introduced foreign private equity funds;and increased financial innovation financing channels in financing strategies.At the level of information disclosure,while listed companies should increase their enthusiasm for information disclosure,regulators should also strengthen their code of conduct and hope to provide other companies with a more complete reference.