Research On The Application And Effect Of Financing Methods In Jifeng’s M&A Of Grammer

As China’s economy enters the new normal,Chinese enterprises respond to the strategic call of "going out" and actively participate in international M&A activities.The practice of cross-border M&A financing is already ahead of the theory,so it is necessary to study it.The case of cross-border merger and acquisition of Grammer,which combines the "controlling shareholder +PE" M&A fund with bank lending,the introduction of private equity investment(PE),the issuance of directional convertible bonds and the application of Earn-out,is worthy of further discussion.By analyzing the M&A case,and combining with existing literature,this paper studies the application of financing methods and the effect of cross-border merger and acquisition by using agency cost theory,trade-off theory,preferential financing theory and synergistic effect theory.Based on the case,this paper makes reasonable use of "controlling shareholder +PE" M&A fund to select financing methods,flexibly applies the combination of PE financing and offshore loan financing methods,actively uses directional convertible corporate bonds for financing,and actively uses Earn-out for contract design.Four research conclusions are drawn: Firstly,build a "controlling shareholder +PE" type M&A fund to solve the time and capital problems of cross-border M&A financing;Secondly,comprehensively use PE financing,offshore loans under internal guarantee,issue directional convertible bonds,use Earn-out and other financing methods to promote the M&A;Thirdly,comprehensively use PE financing,offshore loans under internal guarantee,issue directional convertible bonds,use Earn-out and other financing methods to meet the needs of listed companies,controlling shareholders,PE and other stakeholders;Fourthly,due to the high asset-liability ratio and low net profit rate on sales of Grammer,as well as the short completion time of the M&A,the synergies of the M&A remain to be observed in the long term.The innovation of this paper is reflected in the analysis of the application of financing methods from the perspectives of listed companies,controlling shareholders and PE,to explore the reasons for the choice of financing methods.Secondly,to enrich the research of directional convertible bonds in M&A financing;In addition,the application of Earn-out in cross-border M&A is also added.The significance of this paper lies in that the cross-border M&A of Jifeng has its own characteristics in terms of participants,financing methods and contract design.Through case study,we can explore the practical application of "controlling shareholder+PE" type M&A fund,and analyze the characteristics of equity financing,debt financing,mixed financing and special financing in specific cases,so as to provide reference for other enterprises.