LEVERAGE BUY-OUT (LBO) AS A WAY TO IMPROVE THE EFFICIENCY OF M&A: THEORETICAL AND EMPIRICAL STUDIES

The efficiency of the use of leverage buy-out for mergers and accusations is still doubtful and variable concepts explaining the advantages and disadvantages of this existing concept. The disputes of this question is based on the fact that leverage buy-out (LBOs) transactions increase the debt loan of the companies, and at the same moment it is unclear what is happening with the efficiency of the company. This paper provides a broad overview of the main theories of the use of leverage buy-out as a way to improve the effect of financial synergy of mergers and acquisitions. In addition, five major assumptions are developed explaining the causes of inefficiency of LBO transactions in Russia.