Research On Target Enterprise Choice In Enterprise M&A

Under the market economy, enterprises face the pressure of existence and development since they were established. Generally speaking, the development strategy of the enterprise mainly has two kinds of strategies. One strategy is a development of internal backlog; another is an expanding development strategy of external trade. After developing to a certain stage, enterprises inevitably adopt the expanding development strategy of external trade, to acquire the competitive advantage. Dave. Daniel thought,"The contemporary economy has become the international business economy that the competition ability is very strong. For having the competition ability in the world, the enterprise scale must change larger." The father of management also pointed out definitely,""The huge factory of scale is a progressive headspring of technique". The enterprise M&A includes: the choice of the target enterprise before M&A, the process of concrete implement and also the integration after M&A. A few links are usually complement to each other. Whichever link processing is not good, will cause the failure of the whole M&A. First, in part one, we analyse the basic theories for M&A. Then,it is the core contents of this article-how to choose the target enterprise of M&A through evaluating the enterprise. Because M&A is a capital budget decision for an enterprise, the basic rule of the investment applies equally to the M&A activity. It needs an analytical process of cost-benefit. Therefore, the key is to do a fitting worth evaluation of the target enterprise in M&A. The procedure of worth evaluating not only plays a key role in the enterprise, but also is very important to the target enterprise. It is the foundation that the both parties bid and reach the bargain in negotiation process. In this part, we are detailed to inquire into the contents of the target enterprise worth, common methods and some classic models of the evaluation. Then we analyse the process of the whole target enterprise choice from a more macroscopic angle. In the end, we make a research to the concrete application that the target enterprise is chosen through a classic case. The full text is divided into five parts. The first chapter briefly introduce the basic theories of enterprise M&A. The second one emphasizes the choice of the target enterprise. The third one summarizes the methods and pricing models. The forth one is the procedure of the target enterprise choice. The end is the case analysis. The conclusion to the western enterprise M&A theories, the application and analysis of real cases, especially the inquiry into the aspects of the Chinese enterprise M&A in this thesis, will be helpful to improve the theory study and practice of enterprise M&A in China. From the context of the article, one can observe two creations. Firstly, it put forward clearly the opinion we will distinguish the target enterprise efficiently by applying the method of cost-benefit analysis to the target enterprise choice; Secondly put forward a set of programs for the choice of target enterprise.