The Research About Cases Of Management Buy Outs

It has been proven that management buy-outs (MBO) can reduce entrusting cost and motivate managers'enthusiasm efficiently in western developed countries. In China, the major purpose of MBO is to establish good property right structure, optimize the state-owned capital and motivate managers'enthusiasm, then to increase business profit of enterprise.The article begins in review of theories about MBO and points out that it is consistant between MBO and modern enterprise system in essence. Then after detailed analyzing MBO development situation in western countries, article sums up good experiences of west developed countries and bad experiences of east Europe countries, especially of Russia. It focuses on analysis of successful examples and disputable examples in our country, then summarizes the major problems in domestic MBO process, probes into reasons that cause these problems and tables proposals to solve these problems. The article highlights deep discussion in low transfer price that causes large loss of state-owned capital and conclude that only adoption of the market principle in MBO process and price decided by market and supply-demand relation, then can ensure just and reasonable price. The article's another important part is to conclude the result through theory and data that MBO implementation in public company will lure high profit distribution, then makes public shareholder lose money and managers get extra prifit,that means profit transfer from public shareholder to managers. In conclusion, the article's view is MBO itself does not cause any loss of state-owned capital and"black box"operation is the direct reason; meanwhile, according to our national condition and problems in enterprises which have finished MBO process, the article concludes the scope of MBO. In the end the article believes that MBO in China will have large development along with perfection of law and rule.