Advances in Economics, Management and Political Sciences

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Proceedings of the 7th International Conference on Economic Management and Green Development

Series Vol. 35 , 10 November 2023


Open Access | Article

Analysis of Domestic Acquisitions and Cross-Border Leveraged Buyouts of Companies

Zhumeng Han * 1
1 Shanghai Lixin College of Accounting and Finance

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 35, 114-121
Published 10 November 2023. © 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Zhumeng Han. Analysis of Domestic Acquisitions and Cross-Border Leveraged Buyouts of Companies. AEMPS (2023) Vol. 35: 114-121. DOI: 10.54254/2754-1169/35/20231736.

Abstract

With the development of economy, Chinese companies have started to use M&A to expand their business, and more and more core acquisition funds are investing in LBOs. Meanwhile, the pace of China's economic opening to the outside world is gradually accelerating, and many companies are making cross-border M&A to enter the international market, and leveraged buyout, as a special form of M&A for multinational companies, has also attracted attention and spread widely. This paper first analyzes the basic principles, processes, and characteristics of leveraged buyouts. Based on the current situation in China and combined with specific cases, it points out the necessity and problems of applying leveraged buyouts in China. By analyzing and studying two domestic acquisition cases and two overseas acquisition cases, the paper draws some conclusions. Leveraged buyouts are to some extent applicable to M&A activities of Chinese companies. Despite the challenges they pose, leveraged buyouts will remain an important form of M&A for Chinese firms as long as China continues to improve its legal and financial environment and standardize its operational processes. Through an analysis of China's domestic economic situation and current policies on theories related to cross-border investment in overseas M&A, the advantages and risks of cross-border leveraged buyouts are explored and countermeasures for firms to learn from are proposed.

Keywords

China economy, corporate M&A, leveraged buyouts

References

1. Wu, X.: Research on the theory of leveraged buyout and its application. Master's thesis, North China Electric Power University (2008).

2. Chen, X.: A Case Study on Risk Prevention and Control of Corporate Cross-Border Leveraged Buyouts. Master's thesis, Huazhong University of Science and Technology (2020).

3. Zhang, Y.: Analysis of the motivation and risks of M&A in emerging industries in the Internet consumer environment: The example of Microsoft's acquisition of Activision Blizzard. China Collective Economy 8, 5-8 (2023).

4. Tan, S.: The impact of leveraged buyouts on firm business performance. Master's thesis, Zhejiang University of Technology and Business (2021).

5. Du, N.: A study on the performance of cross-border leveraged buyout of Tianqi Lithium Industry. Master's thesis, Lanzhou University of Technology (2022).

6. Wing, Y.: An analysis of the pros and cons of cross-border leveraged buyouts: An example of the acquisition of Kerr Corporation by Xiwang Food. Modern Business 14, 154-156 (2022).

7. Shi, D.: On the application of leveraged buyouts in corporate mergers and acquisitions. Master's thesis, Southwestern University of Finance and Economics, (2004).

8. Li, K.: Research on the impact of LBO multi-layer financing on the financial performance of acquired companies. Master's thesis, Yunnan University (2018).

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Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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Volume Title
Proceedings of the 7th International Conference on Economic Management and Green Development
ISBN (Print)
978-1-83558-091-2
ISBN (Online)
978-1-83558-092-9
Published Date
10 November 2023
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/35/20231736
Copyright
© 2023 The Author(s)
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated