Overseas Mergers And Acquisitions In Energy Enterprise Value Evaluation Research

In September and October 2013,President Xi Jinping proposed a major initiative to jointly build the "Silk Road Economic Belt" and the "21st Century Maritime Silk Road." Under the guidance of "The Belt and Road Initiative",more and more Chinese enterprises are actively promoting international operations,enhancing their competitiveness in the international market and allocating resources globally.Overseas merger and acquisition has become an important way for Chinese enterprises to actively promote "go global" strategy.Mergers and acquisitions(M & A)face a variety of uncertainties,among which value evaluation is of great concern.Especially for overseas subject of energy companies,the risks are more complex and diverse.Therefore,the accurate evaluation of the value of the enterprise before and after the merger and acquisition is an important content to judge whether to implement the merger and to evaluate the effect of the merger and acquisition.Currently,the overseas mergers and acquisitions of the energy enterprises take a dominant position in China’s overseas mergers and acquisitions.Their M&A target also have dual nature: on the one hand,they must achieve the goal of increasing the value of the enterprises;on the other hand,they must ensure the national energy security and maintain the national economy healthy and stable.Accordingly,this thesis studies the value evaluation of overseas mergers and acquisitions among Chinese energy companies,and draws some valuable conclusions.The main research contents and conclusions are as following:1.Starting with the analysis of the definition and characteristics of energy and energy companies,the micro-factors that affect the value of energy companies are divided into two levels.Qualitative analysis and quantitative analysis are used to combine the external environment and internal conditions.The article builds a regression equation of influencing factors and cooperate value.Because there are many influencing factors,the article analyzes the influencing factors,and then uses factor analysis to extract the common factors to achieve a reduction.The analysis uses linear regression to analyze the key factors affecting the value of energy companies.For energy companies:(1)The value of energy companies is most sensitive to the three indicators: total revenue,total assets and goodwill,which means that the bigger the scale of the enterprise is,the higher the market access ability reaches,and the greater the value of the enterprise achieves;(2)The overall return on assets,return on equity,earnings per share and net margin on sales are weaker on the corporate value;(3)Corporate value is less sensitive to the asset-liability ratio.(4)Cost-income ratio has almost no effect on the value of the enterprise.For the coal enterprises:(1)The enterprise value is most sensitive to both the total revenue and the total assets.That is to say,the larger the size of the enterprise is,the greater the enterprise value is;(2)The return on total assets and the return on shareholders’ equity Rate,earnings per share and net margin on sales are weaker on the corporate value;(3)corporate value is less sensitive to goodwill.(4)The asset-liability ratio and cost-to-income ratio have almost no effect on the value of the enterprise.2.After the merger in 2013,Haohua Energy’s profitability,management ability and financial situation were not significantly better than before the merger,what’s worse,some indicators have deteriorated,EVA was significantly lower than before the merger,showing that the coal industry in Africa by Haohua Energy M & A may become a burden,and did not have a significant role in promoting the performance of Haohua Energy.Corporate performance after the merger continued to decline and change from the growth trend to a downward trend,which means that mergers and acquisitions did not produce synergies.Of course,the effect of Haohua Energy’s acquisition of Africa’s coal industry may still need more consideration about situation of China’s overall coal industry in order to make a more accurate analysis.3.it analyzes the characteristics and attributes of overseas M & A pricing of energy companies.Given gain method is the main means of M & A overseas assets appraisal,the thesis then analyzes the practicality of gain method systematically but points out that it lacks consideration of uncertainties.Therefore,a valuation method using real options has been proposed.There are many uncertainties in the overseas mergers and acquisitions of energy companies.The feature of randomly-fluctuated prices is suitable for valuing the M & A enterprises with the idea of options.However,we know that the price of energy changes very frequently.It is very difficult to evaluate the value of assets with an exact value.For the evaluators,it is considered more reliable to evaluate the value interval of underlying assets.Based on this,the article attempts to evaluate the value of energy option by means of the fuzzy numbers based on fuzzy theory,and summarizes the steps of evaluation.Eventually,the applicability of this method is verified by case simulation.This method can better consider the investor’s investment decision under the fuzzy circumstance in the market environment.When the data can not be accurately measured,the fuzzy set theory can help to improve the pricing effect,and the pricing result is more realistic.