| Since the emerging of MBO which is a special type of acquisition combining the privatization of listed companies and leverged buyouts in 1970s, it has been developed for more than 30 years. At present it has become the leading acquisition method in western countries for it has many positive effects, such as instigating the managers, reducing the agent cost, improving the enterprise operation and so on. MBO has played an important role in improving these countries’enterprise management, enhancing the efficiency of resource allocation, developing the social production and increasing the people’s welfare.Untill now our country still has more than 37 trillion state-owned assets, the economic effect and efficiency of these assets are relatively lower than those of private enterprises’ assets. It leads to systemic economic inefficiency for so many SOEs exist. So it will be a long object and strategic task for our country market reform to make most of SOEs become common competitive enterprises. Although the existing stockholding system reform has made some achievements, there are still a lot of problems existed, especially the economic performance of SOEs has not been improved obviously. The basic reason is that the reform is not complete and the country still has the largest stock in listed companies, intervenes and controls the companies’operation. On long terms, the final direction for SOEs’reform should be privatization—the country withdraws from the majority shareholder status, especially for the SOEs in competitive Industry which is not important for the national economy and people’s livelihood. MBO is a good method for SOEs’deep reform regardess of theoretical or empirical analysis in western countries.This paper collects all MBO cases on Chinese listed companies from 1997 to 2008. Based on these cases, the paper makes empirical research on MBO’s wealth effects. Compared with other researches, this paper enlarges sample size, expands the time period, broadens the measearing indexes for performance, uses the principal factor analysis and variance test. This paper makes a complete analysis on MBO’s wealth effect, including wealth effects for stock grantor, the short and long wealth effects for circulation share holders. The paper shows that the purchasing price for a stock is not significantly lower than net assets per share. So if loss of state assets exists in MBO, the loss doesn’t occur in the process of pricing, but in the process of payment and in the price rebate that the local government allows to the manager in order to prevent workers’ unemployment. This conclusion is remarkably different from the former viewpoint that the low price causes the loss of state assets. This paper also shows that the existing MBOs for listed companies in china don’t have wealth effects, the cause lies in the fact that the market environment for MBO is not mature. So the two main sources including reducing the agent cost and saving tax for MBO wealth effects do not play their roles. But MBO has important roles on clarifying state-owned property rights, deepening the reform to state-owned enterprises and adjusting the economical structure, we should strengthen to build up the market environment for MBO, and the practice to stop the MBOs in large-scaled SOEs and listed companies is completely wrong if we refuse to do what one should for fear of running a risk.After the cease to large-scaled state-owned enterprise’s MBO and listed companies’ MBO from 2005,6 years have passed, the market environment for MBO is becoming more and more mature, and the factors which influence MBO wealth effects are eliminating day by day, especially we have made significant breakthroughs in legal norm and financing system for MBO, so we should release the rigid restrictions on MBOs to large scaled SOEs and listed companies gradually, especially the SOEs, make this mainstream acquisition method play a positive role in SOEs’deep reform and do a service for our country economy’s sustainable development. |
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