Taking China Private: The Carlyle Group, Leveraged Buyouts and Financial Capitalism in Greater China
44 Pages Posted: 28 Aug 2014
Date Written: August 26, 2014
This paper analyses the introduction of leveraged buyouts in China and Taiwan. It focuses on how leveraged buyout firms (foreign financial intermediaries) operate in institutional environments where the state and family blockholder groups are important owners and stakeholders in the private sector. The Carlyle Group’s acquisition of three companies – Xugong Group Construction Machinery; Advanced Semiconductor Engineering; and Ta Chong Bank – provide empirical case studies of stakeholder receptiveness and views on the value of Carlyle’s firm specific resources. We find that the ability of target firms to exploit the resource advantages brought by leveraged buyout firms requires a supportive institutional framework and willingness by intermediaries to adapt their strategies to a range of stakeholders’ claims.
Keywords: Financial intermediaries, China, Taiwan, leveraged buyouts, private equity, business history, financial history, Carlyle Group, public-to-privates, financial capitalism
JEL Classification: G24, G28, G34, G38
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