Case Research On Oriental Nations Corporation Mergers Yitong Information With Premium And It’s Value Creation

Along with the gradual maturity and improvements of the stock market,M & A activity of listed companies has become one of the most important ways to optimize the allocation of resources.Since 2005,China’s M & A market has developed rapidly.With the hot wave of mergers and acquisitions in recent years,for the underlying asset M & A premium rate is gradually increased.For high premium M & A phenomenon occurs frequently,attracted the attention of academia.A Study on Premium M & A by Domestic and Foreign Scholars,M & A value,mergers and acquisitions synergies,mergers and acquisitions to create value of these three aspects.Therefore,this paper uses the form of case study,the above three issues will be completely study in the case of Business-Intelligence of oriental nations corporation acquisition the information of the Yi Tong corporation.Through the display of cases,analysis the acquisition of high value of equity valuation in depth,whether M & A can bring synergies,whether M & A can create value for shareholders.This paper is based on a large body of literature,collect relevant M & A information and data,take the Business-Intelligence of oriental nations corporation high-premium acquisition the information of the Yi Tong corporation as the single case study object,firstly although base on the income approach,the results of equity valuation of the Yi Tong corporation higher than the industry average and other mergers and acquisitions in the same industry,but analyze the core competitiveness of the merged party,the industry characteristics and its development prospects,then dissect the objective basis of the existence of equity valuation premium.Then does the equity valuation premium is recognized by the acquirer and actually paid the corresponding consideration? In this paper,the M & A case to the mergers and acquisitions brought about by the operate synergies,management synergies and financial synergies,analyzed the synergies is the immanent cause of the Business-Intelligence of oriental nations corporation willing to pay a high-priced to purchase the stock equity of the Yi Tong corporation.The system arrangement of the performance compensation agreement establishes a risk control barrier for the acquirer to pay a high premium.Finally,utilize the CAR model of event study to test the short-term market reaction,the BHAR model of event study to test the mid-term market reaction,utilize the market value and Tobin’s Q of the acquirer to test the long-term market reaction;utilize the Analytic Hierarchy Process to test the financial performance before and after M & A,it turns out that M & A has produced a good market response,the financial effect is obvious After the M & A,proving that this case of M & A can bring about the creation of value.The case study of this paper,provides the analysis of ideas,methods and frameworks of whether there is objectivity in assessing the premium in the M & A business,whether there is a high premium acquisition is reasonable,whether the premium M & A can create value for the enterprise and so on.Do a deep thinking of how to treat high premium M & A,how to carry out the feasibility analysis of M & A and so on,hoping to contribute to the deepening of M & A theory and practice.