The Establishment Of A New Evaluation Model In M&A Based On The Life Cycle Of Industry

With the development of market economy,M&A(Merger and Acquisition)booms up as a way of transferring property right among corporations. In western nations, it was by morn than a century of large-scale M&A which helped fulfilling the upgrade of industry and strengthening competitiveness of their enterprises. Also in China, both the volume and the scale of M&A show a trend of growing year after year during the course of deepening market economy. In such environments, the establishment of a new evaluation model in M&A, which should not only coincide with the definition of corporate value but also reflect the curve of growing value, is meaningful to buyers in M&A on making the final right strategic decisions concerning capital managing.In this paper, first we reviewed the three traditional evaluation models of target enterprise. In this part, we analyzed and judged pros and cons of the three models separately, which is one base point the new model lies in. Then we introduced the theory about the life cycle of industry. In this section, we focused our researches on the correlation between values of Target Company and characters of industry life cycle, which is another base point of our new model. Finally, we completed the building of new model based on two above points. Further more, we demonstrated the application process of the new model by a case of M&A.