A Research On Foreign Company Acquiring Shares Of Chinese Listed Company

Great achievements have been taken in economic field after Chinese government took the policy of opening and reforming for twenties. But there are a lot of problems in economic field because of long-term plan oriented economic mechanism in China. For example, there are oblique ownerships, far outdated technologies compared with the newest in the world, the low-level management, and lack money and so on in Chinese enterprise because of the oblique relationship between government and enterprise. The weakly Chinese enterprises have to face the tough internationally competition after entering into WTO. In order to better1 Chinese enterprises and better Chinese stock market, Chinese government have made a series of policies that are convenient for foreign company acquiring shares of Chinese listed company. Because of lacking relative policies, laws and services and so on, foreign companies' acquiring shares of Chinese listed company are influenced. We found the key factor that influenced foreign company acquiring shares of Chinese listed company was the divergence on price.In this paper, the pricing method on foreign company acquiring non-common shares of Chinese listed company in A stock market is the main topic. First, we studied the four common methods of valuating enterprise and the newest valuation method set forth by American scholars. Second, we analyzed the problem of pricing shares of Chinese listed company in A stock market. At last, we discussed factors that influenced thetransaction price and studied two examples in A stock market that one' transaction price was bigger than equity per share and the other is converse.We bettered the newest valuation method put forward by American scholars with the method of equity per share. The bettered method combined the current book value of enterprise with the cash flow in the future. And we can get a reasonable price margin when we use this method to price the shares of Chinese listed company.