Analysis And Research On Leverage Bay-out Introduction

Tested by Five Tides of Merger and Acquisition in America, merger is playing a muchmore important part in integration of enterprise than reforming and spin-off, but the ways ofmerger have limited its development. Merger needs a great amount of funds, which demandsthe company shoud be strongly capitalized, otherwise nothing could be done. the emerge ofLBO gave enterprises many new ways to solve the diffcult of merger and carried merger to anew stage.LBO makes good use of the leverage of miney, in other words, an enterprise acquiresanother big one by debt financing, but the enterprise spend a little funt of its own. In theprogress, the rate of obligating and equity capital is called Financing structure. LBO settles theproblems of Financing structure and financial sourse.What is more, Financing structure decidesan enerprise`s development in the future, its financial burden and the success of LBO.The article will analyse the advantages and disadvantages of LBO. Because the modelesof LBO in western countries can be carried out in China for different rules ande laws. So in mypassage I will put up with some models which are propitious to China by analysing some typicalcases of LBOin China. Meanwhile, I will introduce the model of Financial leasing.