Analyses Of Applicability And Risk On Leveraged Buyout In Mergers And Acquisitions Among Chinese Corporations

With the development of Chinese capital market, the number of the mergers and acquisitions among Chinese corporations arise progressively. To develop quickly, enterprises group often use the means of operation of the capital. As a new form of corporation mergers, leveraged buyouts have been paid more and more attentions in academic field of China.Through analyzing the origin of leveraged buyout in American, we deeply study the principle, the whole process and financing structure.Relating to the situation of our country, the paper puts its emphasis on the analyses on the applicability of leveraged buyouts in China, and demonstrates the feasibility of leveraged buyouts in our country. Only both purchase side and the enterprise purchased meet the certain requirements, leveraged buyout is feasible.According to the current process of leveraged buyout, the paper study the main risk such as legal risk, the risk of making a price, financial risk, running risk, and put forward some relevant measures to avoid some risk. We can broaden the financing mode such as Unit trust, fund of LBO. and transferable bond to reduce the financial risk.