The Study Of Enterprise Value Based On M&A Evaluation

M&A, intensified in our country as a important way of capital operation, is playing an irreplaceable role on both state economics development and enterprise expansion growth. However, there are mostly meagre successful examples. Most M&A finally failed in accomplishing acquirers’ expectation. Among many reasons that cause failure, the most significant reason is that they can’t assess the value creation from M&A accurately. It is necessary for a successful M&A to deeply analyze M&A risk and assess the merger value accurately. With the continuous development of the internet, merger and acquisition involving internet companies is increasing. At president, internet enterprise M&A has taken the dominant position in the sixth M&A wave. Driven by the internet M&A boom and the conception of "Internet+", many traditional enterprises are gradually walking on the way of "+Interaet" M&A. But it is unknown that whether traditional enterprise can create value through acquiring internet enterprises. Based on above situations, the article will study the assessment of internet enterprise value when traditional enterprise acquires internet enterprise. The study is aimed at providing theoretical guidance for accurate evaluation of enterprise merger value, so as to improve the success rate of internet M&A.The paper consists of five parts:Part one, introduces the research background, subject significance,the president situation of the research and new viewpoints; Part two, expounds the theoretical foundation of this article:Firstly, state the Synergy Effect Theory. Then, expounds these two value types used to evaluate enterprise M&A value:market value and investment value. Finally, introduces and analyzes four common enterprise value methods and their applicability. Part three, define the internet enterprise in study and analyze the characteristics of them. Following which, elaborate the motivation of traditional enterprise acquiring internet enterprise and its M&A, which will pave below value type selection and application of assessment methods in evaluating internet enterprise M&A value. Part four, deeply study the value type selection and the application of assessment methods in evaluating internet enterprise M&A value. In this part, the paper proposes a method that can be used to determine which value type should be select in assessing internet M&A value. Meanwhile, the article advocates the key to determining the value type is to judge whether acquiring internet enterprise will result in synergies. By judging the synergies, appraisers can determine whether the value is market value or investment value. After determining the value type used, in this part, there proposes some improvement on the common enterprise evaluation methods and discuses the parameters so that they can be use to assess the internet enterprise value. Part five, according to all the above, the paper gives three suggestion about how Assessment Agencies improve evaluation accuracy.This article’s conclusion as below:Firstly, it is uncertain that a traditional enterprise acquiring an internet enterprise can create synergy value. Traditional enterprises should be careful of carrying out M&A and pay more attention to analyze merger value of internet enterprise. Assessment agency should determine the evaluation type according to whether there is synergy or not, and then apply appropriate evaluation methods to improve the accuracy of assessment for successful M&A; Secondly, combined with Delphi, the FAHP(Fuzzy analytical Hierarchy Process) can take non-financial factors into consideration to judge whether M&A can create synergies effectively. Then, we can determine the value type based on it. Thirdly, to improve the accuracy of evaluation, assessment agency should not only emphasize evaluation methods, but also attach importance to the value type. Besides, the capability of assessment workers should be improved.