Study On The Pricing Factors For Targeted Company In Three M&A Approaches

M&A is common in modern society, indicating a certain period of the development of market-oriented economy. It is an effective way for corporations to transfer from manufacturing to capital management, as well to accelerate their capital expansion. Being a core stage in M&A, the pricing of the targeted company will largely determine the whole process. Therefore, in order to raise the efficiency of M&A and reduce the economic losses in case of a failure, it is very important to make a research on the factors that influencing the pricing.The Pricing in this thesis contains two meanings: first, whether the price has fully reflected the intrinsic value of the targeted company; second, whether the price can be accepted by all parties. Thereby, the factors that influence pricing can be divided into two categories: intrinsic value and extrinsic strategy.Intrinsic value is the base of the pricing, and knowledge and skills of economics, finance, laws and taxation and a great deal of survey, evaluation and analysis are needed to evaluate it. However, a flexible use of extrinsic strategies can largely reduce the cost, and can satisfy all parties' expected benefits.There are three bidding types in M&A, namely, centralized trading of securities at competing prices, tender offer and share acquisition agreement. The main influencing factors are different in different types of bidding.In centralized trading of securities at competing prices, the use of strategy will affect the cost to a great extent since the buyer can incorporate the arbitrage and M&A plan together. If the bidding price is below the targeted price, M&A can be carried out soon; while if the bidding price is higher, arbitrage is used to bring the stock price down to intrinsic value.In a tender offer, the study will be focused on the reason and measurement of the premiums risk of the targeted company. Whereas in a share acquisition agreement, the approach of payment has become the key factor that determines the success of M&A.It has great theoretical and practical significance to study on the factors that influencing the M&A pricing. It will enrich the theories, raise the efficiency and cut the cost of M&A, and help to make the process go smoothly.