The Value Of The Target Enterprise Evaluation In Mergers And Acquisitions

In modern society,the market competition is increasingly fierce.when the single enterprise cannot rely on their own strength to meet the needs of market competition,they need to by the way of mergers and acquisitions(M &A)to expand their scale and enhance their own strength,so as to adapt to market demand.Mergers and acquisitions' development is quite rapid,from the beginning of nineteenth Century,it has gone through the six wave of M &A.In the Chinese market,M & A activity began in 1990 s,and intensified in the following decades.In the process of M & A,sometimes enterprises suffer from the failure because of the purchase price is too high.So the assessment of the target enterprise's value before the M & A is very important.Which is also the key element of success or failure to the M & A.In this paper,the case study of Company Alibaba acquisition of Youku Tudou Inc.intends to describes how to assess the value of the target enterprises in the M & A process,so as to avoid the acquisition price is too high,resulting in the failure of the acquisition.This paper uses the combination of theory and empirical analysis to evaluate the value of target enterprises in M & A.Based on the relevant theoretical research at home and abroad,this paper expounds the theory of M& A and enterprise value evaluation,The evaluation methods of enterprise value are analyzed,including three main evaluation methods: income method,cost method and market law,and the advantages and disadvantages of these three methods are briefly described.In the empirical part of the evaluation of the target enterprise value,we use Alibaba M & A Youku Tudou Inc.as an example,First introduces the motives and process,secondly the overall value of FCFF model in income approach on Youku potatoes to do the assessment,at the end of the acquisition process of value creation and value performance of mergers and acquisitions in the value creation are discussed.Through the research of the whole paper,this paper discusses the key aspects of the evaluation of the target enterprise in the M & A,and puts forward the prospect of the future research.