Research On Value Creation Of Buyout Fund In Cross-border M&A From The Perspective Of Risk Dispersion

In recent years,under the background of upgrading industrial structure,more and more Chinese enterprises not only carry out business reform internally,but also focus on overseas markets,hoping to achieve rapid improvement through cross-border mergers and acquisitions(M&A).However,looking at the failed overseas M&A cases of domestic listed companies in recent years,we can find that they all do not well control various risks in cross-border M&A.As one of the innovative M&A models in recent years,buyout fund is favored by the capital market with its unique advantages and has been gradually applied in cross-border M&A transactions.The present academic researches on buyout fund mainly focus on its operation modes,advantages,characteristics and potential risks.Meanwhile,the value creation ability of buyout fund is mainly limited to the dimension of market value,and there is a lack of analysis and judgment on the value of other dimensions.Firstly,according to the existing literature,this paper builds the risk dispersion and value creation mechanism models of buyout fund in cross-border M&A,then clarifies the relationship between them.Secondly,this paper selects the classic case of China Tianying Inc.’s acquisition of Urbaser under the help of Cecep Huayu Fund Management Co.,ltd.to introduce the background and process of this M&A,and specifically expounds the risk dispersion of Huayu buyout fund from the dimensions of information,capital and resource integration in this cross-border M&A.At the same time,according to the theoretical model,this paper analyzes the value creation paths and effects of Huayu buyout fund from the dimensions of market value,financial value and strategic value,and finally summarizes the successful experience and shortcomings in this case,so as to provide effective references for other companies to apply buyout fund in cross-border M&A.This paper shows that Huayu buyout fund can play a good role in risk dispersion from different dimensions of cross-border M&A,mainly controls the risks of information distortion,valuation,financing and payment,resource integration and so on.At the same time,the buyout fund can significantly improve the market value of China Tianying Inc.and make the certain financial and operational synergies.However,due to the special industry and short integration period of this case,China Tianying Inc.and Urbaser still need to run in in terms of debt repayment and profitability.On the whole,buyout fund can create multi-dimensional values in the cross-border M&A and have the good applicability.