Research On Value Assessment Methods Selection And Application Of Mergers And Acquisitions In Financial Business

In recent years, with the continuous development of China’s financial business, and the influence of financial business international mergers and acquisitions, corporate mergers and acquisitions events occur more and more frequently. M&A is not only can quickly expand the enterprise scale, but also can effectively improve the market competitiveness. The enterprise value assessment is a key link in the process of mergers and acquisitions. Under the condition of market economy, value assessment is a necessary social intermediary activities,which as a social, impartial economic activities. Therefore, it is important to reasonable selection and application valuation method in the financial industry mergers and acquisitions to the healthy development of China’s capital market.The evaluation of the value in financial business mergers and acquisitions in China is studied. This paper on the basis of the traditional assessment theory, put forward the method of cash flow and real option combined which make evaluation process scientific, evaluation results accurate. The theory is discussed in the first half of this article, after the part is the case analysis what is given to show of the method. Firstly, the research background and significance of financial business mergers and acquisitions and value assessment is introduced, relevant research results is reviewed, technology roadmap is proposed.Secondly, the concepts and the financial business mergers and acquisitions valuation theory are introduced. Compare again, it is detailed to analyze of the market method, income method, cost method and real option pricing method as well as the advantages, disadvantages and application environments. In order to known whether applicable to value assessment of domestic mergers and acquisitions in financial business. However, these traditional methods are not applicable because of the particularity of financial business. It is unable to assess the value when enterprise in the face of uncertainty and the options of the right obtained from mergers and acquisitions. These options are valuable in itself, and sometimes very significant.if these options is not taken into account will in a certain extent result in making mistake decision.So traditional valuation methods that it cannot well served for the mergers and acquisitions in financial business.The paper set up a model of the financial business valuation,what is the combination of DCF(Discounted cash flow, discounted cash flow analysis) and ROP(Real option pricing, real options pricing).In this paper the model is referred to as D-R. The enterprise value is assessed by D-R model, what is not only include the current entity value of the financial business, but also cover the value of sustainable development produced by mergers and acquisitions. D-R model Perfect the evaluation method of China’s financial business. Then through Ping an M&A Shenzhen development bank(hereinafter referred to as "Shen Development") illustrates the concrete application.Finally, what is pointed out is that deficiencies of this paper and outlook of future.