A Study Of Evaluation Of Target Enterprises In The Merger & Acquisition

As an effective resource allocation mode,merger & acquisition is an important way for enterprises to getting bigger and stronger. Merger & acquisition has been a hot topic recently no matter in the domestic capital market or foreign capital market. As a result, selection of target companies and evaluation of them are of great importance, not only influencing the feasibility of merger & acquisition, but also determining the fate of it. As for unlisted companies especially, because there is no market price for the equity of them, the determination of the price in merger & acquisition must be based on evaluation. While listed companies'stock or market estimation can not always accurately reflect its intrinsic value .It is necessary to identify the authenticity and reliability of market estimation through evaluation. In this thesis, evaluation of target enterprises in the merger & acquisition is considered as a research object. The thesis is of practical significance.The method of capital evaluation, particularly the method of the replacement cost of assets, which is only a measure of the value of assets, is not suitable for the separate evaluation of target companies in merger & acquisition. So it has lots of flaws and can easily lead to massive loss of state assets. As China's capital market continues to improve and the merger & acquisition activities by enterprises on their own happen in the large-scale, method based on market price, method based on cash flows, method based on options pricing will certainly get more and more attention. In this thesis, theoretical research and case study method are used. In the part of theoretical research, four methods are analyzed. Because each approach has its own characteristics and applicability, this thesis concluded that: It should be based on objective business'prospects for the development, acquisition goals, objectives, the company's shareholding structure, characteristics of their industry, business objectives, degree of industry maturity of target companies and the professional standards, etc. to select appropriate assessment method. In case study, according to the thought of this thesis, analyzed the case, and used three methods to analyze the acquisition price. Finally, a few advices are made in establishing a correct assessment of the environment and improving the concept of two raised a point proposal.