Financing Mode Selection Of Enterprise Mergers & Acquistions

Nowadays, the trend of the global economy integration has been deeply strengthened, people at all levels have drawn more attention on the enterprise mergers &acquisition, since it's a kind of effective means to expand market share, develop scale production and optimize enterprise capital structure.The merge and acquisition of enterprise is a complicated and systematic process. In general, there are four stages in enterprise combination, which are investigation, negotiation, administration and conformity. As a part of execution procedure, corporate financing is the most important one during such process, which has surpassed the enterprise development tactic consideration, therefore uplifting to such a high level to the development strategy. It's of vital significance and severe urgency to study on the problem of corporate financing during enterprise combination.The thesis firstly introduces the related conceptions of combination and financing, reviews the financing theories in the western countries, and analyze each M&A financing methods comprehensively and systematically.Then, based on drawn lessons from Pecking Order Theory, Contractual Theory and Control Theory, this paper build an M&A financing channel choosing model which regard enterprise value maximize as the goal. According to the model, the merger firms can choose the best financing channel from equity financing, debt financing and internal financing, and define the optimum financing scale, after estimating the output ability of the new enterprise after merger. Besides, this test emphasizes that merger firms should also consider the financing cost and financing risk to make the enterprise value maximum.Finally, the author puts forward suggestions to develop China's enterprises financing of merger and acquisition.