Research On Value Creation Of Merged Enterprises Under The PE Holding Investment Mode

PE is Private Equity Investment,which is an equity investment in enterprises in a non-public manner.In the traditional participation-type investment mode,PE institutions only act as financial investors to help listed companies reduce M&A risks through resource integration and industrial expansion,and rarely participate in strategic adjustments and business decisions of enterprises due to the low shareholding ratio,which is not conducive to the enhancement of listed companies’ performance and market value.Therefore,the practice expects PE to actively engage in holdingtype active investment,and to focus on the management and enhancement of long-term enterprise value,thereby better serving the transformation and upgrading of the real economy.In recent years,PE institution holding-type investments start to emerge in Chinese domestic,but the relevant research literature is relatively scarce.Based on this,this thesis selects the holding investment of Belle International by Hillhouse Capital Group as the research object and discusses it from the perspective of enterprise value creation.First of all,this thesis introduces the complete process of privatizing Belle International by private equity consortiums such as Hillhouse Capital Group in the form of holding investment,and analyzes why Belle choose Hillhouse Capital Group as the acquirer from the perspective of motivation,among which,the enterprise mainly needs for long-term development,and the resources and experience of Hillhouse Capital can carry out business transformation and upgrading faster and better.In order to further verify whether the introduction of PE institution can create certain value for the enterprise,the thesis then examines four perspectives: market effect,financial effect,non-financial perspective and long-term value creation capability.In addition,based on the important role played by PE in financing,investment,operation and governance activities,this thesis analyzes the path of value creation of Belle International through the role of Hillhouse Capital Group.From the study,the following conclusions were drawn in this thesis: firstly,the effect of Hillhouse Capital Group on the enhancement of Belle International’s enterprise value and value creation capability is significant;secondly,the value creation path of Belle International under Hillhouse Capital Group is clear and can be enhanced through financing,investment,operation and governance activities.Finally,this thesis puts forward corresponding suggestions from the perspectives of enterprises and PE institutions respectively: for enterprises,they should focus on their own development,cooperate with private capital at appropriate times and increase their shareholding ratio appropriately,but should not rely excessively on external investors;for PE institutions,they can make industrial layout in advance and actively change to PE holding-type investment mode,pay attention to longterm development.In summary,the research in this thesis helps to correctly understand and evaluate the role played by PE in enterprise value creation and the realization path,in order to provide reasonable insights for enterprises to introduce PE and new ideas for PE institutions to change their investment mode and improve their post-investment management strategies.