Research On Synergy And Risk Of Leveraged Buyout Of Enterprises

Leveraged Buyout(LBO)is a special M&A mode,through which many small-scale or narrow-scope enterprises can complete the M&A of large-scale enterprises,its "throw a sprat to catch a herring" characteristics are welcomed by more and more enterprises,thus expanding the scale to improve market share.The important criterion to measure the effect of leveraged buy-outs is to evaluate the realization of the synergy effect of operation,management,finance and intangible asset.It should be noted that the synergy effect may not be realized in every leveraged buy-out.Therefore,it is very important to study whether LBO has synergy effect and what risks exist.In this paper,a typical leveraged buyout case of new energy enterprises in2018—Tian Qi Lithium merger and acquisition of SQM is selected as the research object.First of all,understanding the current development of China’s new energy enterprises and extract the unique characteristics of the industry;Then it introduces the case of Tian Qi Lithium M&A to SQM,including the basic situation of the two enterprises,the process of LBO and the motivation of this M&A;Then we analyze the acquisition of SQM by Tianqi Lithium Industry from four aspects: Operating Synergy,Financial Synergy,Management Synergy,and Technical Innovation Synergy,this paper analyzes the SQM of Tianqi Lithium’s M&A with the help of entropy method,and verifies it with EVA.Finally,it analyzes the risk of Tianqi Lithium Industry’s acquisition of SQM according to the problems in the case,in order to give more valuable help to other enterprises which have the intention of leveraged buyouts,the conclusion of the research is summarized and the M&A proposals are put forward.