Research On Financing Method Optimization Of Tongfu Weidian Acquisition AMD

The 2014 State Council's "Government Work Report" clearly stated:"Improve competitiveness in the process of going global,advance the reform of foreign investment management methods,implement a filing system as the mainstay,and substantially decentralize approval authority".This acquisition responds to the State Council's "Going Global" policy call and is in line with Tongfu Microelectronics' international development strategy.This article applies the MM theorem,trade-off theory,and priority financing theory to study the financing strategy of Tongfu Microelectronics' acquisition of two AMD subsidiaries,and uses event analysis to infer the merger financing strategy of this case from a quantitative perspective.After there is room for optimization,it analyzes the specific optimization countermeasures of financing strategy from a qualitative perspective based on the theory of optimal order financing.The article uses a combination of case study method,literature analysis method and qualitative and quantitative research method to analyze the selection of Tongfu Microelectronics M&A payment methods,the selection of financing methods,the evaluation of financing effects and the optimization of financing strategies.As far as the choice of payment method is concerned,since AMD is facing a strong debt crisis around 2015,its desire to accept cash payment is relatively strong,so the payment method for mergers and acquisitions is mainly cash payment.As far as financing methods are concerned,Tongfu Microelectronics mainly uses external equity financing,with a small proportion of debt financing.After a comprehensive analysis,the effect of the financing strategy in this case was evaluated.For example,the cost of external equity financing was too high,the financing method was relatively simple and the risk was higher,and the industrial fund as a strategic investor strengthened the company's ability to integrate resources,etc..For the optimization of financing strategy,it is proposed that the company should increase the proportion of debt financing,and give priority to the use of lower-cost bank loans.While using equity financing,it should carefully consider the timing and issue stocks to raise funds under favorable conditions.After the above analysis and demonstration,the following suggestions are made for the financing of mergers and acquisitions in the semiconductor industry:First,the supervisory authority should consider broadening the financing channels of enterprises in various ways,so that enterprises can use different financing methods for financing.Second,we should vigorously promote the development of financial intermediaries,which have professional M&A financing strategy planning capabilities.Finally,we must pay attention to the importance of preliminary preparations.The overall planning and arrangement of financing strategies and the timing of equity financing are inseparable from preliminary preparations.