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Research on selection of target enterprise in mergers and acquisitions in the

Author: Zhao Hua LiJianHui From: www.yourpaper.net Posted: 2010-06-02 20:26:13 Read:
 's acquisition of [Keywords] enterprise; enterprise
[Abstract] M & A is an important way of modern enterprise financing, the development of enterprises play a decisive role in the role.While the acquisition target enterprise choice is the key link, has the important theory significance and practical value of target enterprise M & A Study of choice.

As competition intensifies, M & A has become an important means of enterprise development, and our research on M & A started late, is based on the foreign research, at present, analysis and Research on the theory of M & a more concentrated in the M & a theory of motivation, the M & a performance demonstration, transaction information collection and the conformity management aspects of mergers and acquisitions, early is important one annulus -- Study on the selection of target enterprises are not many, this paper reviews and summarizes the relevant research literature of choice of target enterprises, in order to provide reference for the related research.
Theoretical study of and
the selection of target company in M & A, a
In the aspect of the choice of target enterprises, due to the motivation of M & A is different, different merger motives theory are the choice of target enterprises have made restrictions, theoretical study on the selection of target company abroad, the main theories are:

(1) the theory of transaction cost, that M & as is the market transaction into internal relations, so as to reduce the transaction cost.Is a theoretical explanation of vertical merger of enterprises.
(2) undervaluation theory, mainly due to speculation, the theory is that: in the market economy, as investors have the information is not comprehensive, resulting in a capital market many lesser-known small firms relative to large enterprises price undervalued.Company value is underestimated impact on M & A in general Tobin's Q ratio that enterprise, Q stock market value (V) and the replacement cost (K) ratio, q=V/K.When the q> 1, explained that the enterprise stock market value than the enterprise M & a replacement cost, the formation of the possibility is very small; when the q< 1, explained that the enterprise stock market value is lower than the enterprises purchase replacement cost, enterprises have good prospects of gain, so the possibility of a larger formation of M & A.
(3) the economies of scope and risk dispersion theory, scope economy theory and risk theory to make an explanation of the Chinese Corporation Conglomerate merger.If the production of varieties of a single product, once the market downturn, the enterprise will face the huge risk, so through mergers and acquisitions to spread risk.The scope of economic theory and risk theory for mixed merger provides theoretical support.The enterprise through the hybrid acquisition strategy to achieve economies of scale and diversification of risk, the formation of production cost advantage, marketing advantages and the advantages of technological innovation, realizing the diversification of management, reduce business risk.
(4) the market power theory and enterprise advantage sharing theory.The theory is that M & A can make the enterprise superiority share in the merger enterprise and target enterprise, realize the complementary advantages, enhance competitiveness.In the real market competition, an enterprise may have other companies do not have competitive advantages, such as advanced management experience, technology, brand, product differentiation and unique marketing methods, enterprises through mergers and acquisitions to share between enterprises and enterprises, so as to improve the overall benefits.
Domestic scholars on the theoretical study of the target enterprise choose less, tend to choose the target enterprise factors need to be considered and method of optimal selection.Liu Xiangrong (2001) analysis of the general steps and factors of Target Corp are described; Ouyang Chunhua (2004) focuses on different strategic influence on the selection of target company, Liu Zhibo) 2004) through the empirical research on the general characteristics of Target Corp in China M & A, the Qian (2007) illustrates in detail the application of analytic hierarchy process in the target the choice of.
Research on the method of

assessment of the target enterprise in M & a value of two,
In the selection of target company, the value assessment of the target enterprise is an important part of.Enterprise value assessment of development in foreign countries have been relatively mature, the main methods are: discounted cash flow method, market method, NPV method, cost method.Western capital market is relatively effective, as the stock value assessment of enterprise value.However, due to two yuan of special structure of China's securities market shares and non-tradable shares in circulation from domestic market and overseas market and strict isolation, resulting in China's listing Corporation value evaluation difficulty, therefore, discounted cash flow method and net present value method is mainly used in evaluating the value of the listing Corporation, in evaluating the value of the non-listed company. Income approach, use is more extensive, but because of the information disclosure of non-listed company is not sufficient, the market comparison approach applied more widely.In addition, the cost method is also applied, enterprise value evaluation cost method, replacement cost method, it is from the enterprise reconstruction ideas to consider, in the assessment of the re-construction of a desired and be evaluated the same enterprises or production capacity and profitability of investment as a whole in the value of the assets on the basis of judgment.This method has some subjectivity in the evaluation of assets physical depreciation and economic depreciation, and it is difficult to reflect the return of assets.
In addition, Stewart (1991) proposed the economic value added (EVA) value evaluation model.The company's economic value added to advance book income minus the asset value multiplied by the weighted average cost of capital.EVA reflects the net operating profit after tax to deduct the cost of debt capital and equity capital cost income, truly reflect the real enterprise to create value, can effectively show the financial status and business development capacity.
In recent years, the application of real options in the evaluation of value and more extensive.AngelienG.Z.Kemna (1993) Fina in capital budget, accounting, application of real options in the whole process, it was found that for the strategic decision, real option is more useful than the traditional capital budgeting methods.
The scholars in our country also valuation methods in M & A and pricing from many different angles were studied.Li Changqing (2002) put forward the enterprise merger and acquisition is the enterprise as a commodity for transactions of property rights, studies the methods of enterprise merger and acquisition pricing strategy, given the decision model and decision procedure.Nie Zhihong (2002) summarizes some methods of evaluation of target enterprise independent value in practice, and from the perspective of qualitative structure of a M & a whole value evaluation framework.Yu Jian (2002) put forward the concept of the target enterprise merger premium cash flow analysis and overall evaluation, put forward the idea of value assessment method of the unlisted enterprise merger.Huang Wei (2007) discusses the application of real option in the objective enterprise pricing in
.
To sum up, thinking and method needs to use different levels of value assessment of target enterprise in mergers and acquisitions, on the other hand, in every trade all use pricing model, weighing all all pricing factors also can't do.Should be based on the features of M & A, the selection method and model for the in-depth research and analysis.
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