Mergers and acquisitions: Comparative study on management buy-outs in UK and China

Abstract

MBOs are an increasingly integral element of global corporate finance. It originated in UK in the late1970s and spread rapidly in the early 1980s. The market and legal regime for MBOs in China lags considerably behind development in UK. But MBO is beginning to become an important innovation in Chinaa??s economic reform. Recently, a variety of state-owned companies and collectively-owned enterprises in China utilize MBOs to privatize and clarify the ownership, convert themselves into standard companies and stimulate the management. In spite of the issuance of several supportive rules and regulations pertaining to MBOs over the past years, there remain quite a lot of obstacles and risks when conducting the deals under the Chinese legal regime. To take advantages of MBOs during the special period of state-owned enterprisesa?? reform, relative laws and regulations should be improved or established to incorporate the merits of sophisticated modern English law.