| Merger and acquisition(M&A) is an important way of corporate development,and it plays an important role on the development of modern corporations. Selection of target corporations is the key to M&A of corporations. It has the significant theories meaning and practical value to study the selection of target corporations."The correct goal means half of success." The principle can be also applied to M&A. However, the M&A history in the last hundred years shows: part of acquiring companies neglected the M&A target-choice so that they chose the target company in error at the beginning of M&A; this kind of M&A often ended in failure. Therefore, the thesis will focus on the problem: how to choose the target company correctly while merging. This thesis studies the problems that appears in M&A from theories and practice, and analyzes the reason of these problems. On the foundation, the thesis studies the procedure and method of selection of target corporations in M&A. The specific procedure of selecting target corporations are as follows:Confirming the whole development strategy, the development condition analysis of acquiring corporation, selecting the appraising indexes of target corporations, searching target corporations, preparatory choice of target corporations, evaluation of target corporations, target corporations'investigation, appraising and choosing the best corporation.Evaluation of target corporations is the core of M&A and prominent part of selection of target corporations. With reference to fundamental theory and experience of corporate evaluation, the thesis explores the basic theories and practical problems of corporate value, in order to establish a theory and method system as guidance to corporate valuation. This thesis gives an analysis on the three methods of corporate valuation, including discounted cash flows method, market method, and cost method. Furthermore, the thesis introduces EVA method and real options method, and discusses their respective adaptability and limitation. |
