Study On The Application Of PE In Corporate Cross-Border M&A

With the increasing level of Chinese foreign economic cooperation,cross-border M&A has become an important way for Chinese enterprises to invest directly overseas.Through cross-border M&A,enterprises can not only expand their scale,business scope and enhance their strength,but also acquire advanced technology and market resources to improve their competitiveness.However,a successful cross-border M&A requires not only sufficient capital sources,but also professional management capabilities and strategic design.Due to information asymmetry and financing constraints,the success rate of cross-border M&A by Chinese enterprises is not high.And it is worth to explore how to develop an effective "Outbound Strategy" for Chinese enterprises.In recent years,private equity funds has become a new mode of participation in cross-border M&A as the global economy continues to develop and the level of internationalization of enterprises increases.Many successful cases have shown that the introduction of foreign private equity funds has effectively promoted the success of cross-border M&A of Chinese enterprises.Therefore,the existing studies on the participation of private equity funds in cross-border M&A are mostly focused on foreign countries,and there are fewer studies on the participation of Chinese private equity funds in cross-border M&A.The role of private equity funds in each stage of cross-border M&A is also less studied.In this thesis,we try to investigate the role of domestic private equity funds in cross-border M&A from the perspective of the dilemma faced by Chinese enterprises in cross-border M&A,focusing on the following questions:What is the necessity of introducing private equity funds in cross-border M&A of Chinese enterprises?How do local private equity funds play a role in cross-border M&A?What is the effect of the role of local private equity funds on the value creation of cross-border M&A?This thesis takes the cross-border M&A of environmental giant Urbaser by CNTY as a case study.Firstly,it analyzes the two major dilemmas faced by Chinese enterprises in cross-border M&A and illustrates the necessity of private equity funds to solve dilemmas.Secondly,a multi-dimensional M&A performance evaluation system is constructed based on the case M&A motivation to evaluate the value creation of corporate M&A,in order to verify the effect of local private equity funds on corporate cross-border M&A.Finally,this thesis draws the following conclusions.Firstly,at this stage,Chinese enterprises face many difficulties in cross-border M&A,and it is necessary to introduce private equity funds for enterprises with scarce resources and lack of experience in cross-border M&A.Secondly,the participation of local private equity funds play an important role in promoting the success of cross-border M&A,which is mainly manifested in the following two major mechanisms:the private equity funds’ substitution effect on the enterprises’ lack of advantages,and the substitution effect of such advantages.Thirdly,cross-border M&A involving local private equity funds generate value in four areas:operational,innovation,financial,and managerial.The theoretical significances of this thesis are as follows.The existing studies on the participation of private equity funds in cross-border M&A focus on foreign countries and few studies on the participation of local private equity funds in crossborder M&A.The existing studies on the role of private equity funds in cross-border M&A are not perfect,and less attention is paid to the role played by private equity funds in each stage of cross-border M&A.This thesis hopes to enrich the research on the role of local private equity funds in cross-border M&A by using the case of CNTY’s acquisition of Urbaser.The practical significances of this thesis are as follows.Firstly,to provide a reference for Chinese enterprises to choose the channel for large-volume cross-border M&A.Secondly,to provide ideas for the future development direction of private equity funds in China.Thirdly,to provide a reference for the government to encourage and support local private equity funds.