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THE CHINESE STYLE MANAGEMENT BUYOUTS

Jun Du and Bach Nguyen

Introduction

A management buyout (MBO) is an acquisition in which a firm’s equity is fully or partially acquired by the incumbent management team, often with the participation of private equity (PE) investors (Wright et al., 2001). MBOs originated in the US but later on occurred globally, for both private and public firms. The majority of the transactions are by divisional, secondary, private-to-private, and family-owned buyouts. Strömberg (2008) estimates that public-to-private MBOs account for less than 7% of total worldwide buyout transactions in terms of number of deals, and 28% in terms of value, which explains why the public-to-private MBO is not the dominant theme of the ...

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