Analysis Of The Motivation,Value Creation And Performance Of The “listed Company + PE” M&A Fund

"Listed company + PE" M&A funds are listed companies or related parties and PE co-sponsored M&A funds.It has swept the market since its inception in 2011,and some problems have caused obstacles.However,as an innovative way,the "listed company+ PE" merger fund can promote the deep integration of financial capital and industrial capital,effectively integrate various market resources,and play a role in the everincreasing demand for mergers and acquisitions.At present,the development of M&A funds in China is not yet mature,the related theoretical research is relatively thin,and the actual application is not mature.So why do listed companies cooperate with private equity investment institutions to set up such funds? How does this kind of fund help listed companies achieve mergers and acquisitions? How to create value in the process and what is its performance? The answers are significant to its better use in the practice of mergers and acquisitions.This article takes Sunbird's establishment of an M&A fund to acquire Yaguang Electronics as an example to discuss the motivation of the establishment,the operation and value creation mechanism,and the performance.The research found that:(1)The main reason for Sunbird to set up an M&A fund was to introduce PE institutions to solve the problem of funds,so as to seize the opportunity to indirectly lock the target.(2)Sunbird guarded against the risk of subsequent changes in the control rights of listed companies by rationally arranging the proportion of capital contributions.The ingenious design scheme made the operation of the M&A fund beneficial to all participants.(3)Although PE institutions had achieved exit at the level of M&A funds through share swaps,they still participated in mergers and acquisitions with listed companies as a "community of interests".The value holding and value promotion continued to extend the value creation chain at the level of M&A funds to the level of listed companies.Only after the expiration of the stock restriction period can exit can be realized.Although it is different from the value creation mechanism of traditional M&A funds,the essence remains the same.(4)In terms of the performance,compared with the traditional M&A methods of listed companies,the release of the information that Sunbird set up an M&A fund can bring excess returns to shareholders of listed companies in the short term,and can effectively improve the solvency and profitability of listed companies.The participation of PE institutions improved investors' expectations and the integration effect after mergers to a certain extent.Based on the above research,this article proposes the following recommendations from the perspective of listed companies and regulatory agencies: listed companies can leverage this model of M&A funds to conduct mergers and acquisitions according to their own development needs,but they need to prevent the risk of control transfer and pay attention to the value of the target after the merger.Regulatory agencies need to reasonably regulate the behavior of relevant agencies and strengthen information disclosure while respecting market innovation.