Mergers And Acquisitions Pricing Research Of Listed Iron And Steel Enterprises In China

As one of the key industries in the supply-side structural reform,the iron and steel industry's merger,acquisition and reorganization take place frequently.As listed company play a more important role in the iron and steel industry,so the listed enterprise's merger,acquisition and reorganization is of great significance.The core part of the acquisition and reorganization is pricing method used in this process.However he traditional pricing methods have limitations,so this paper study the pricing of merger and acquisition in steel industry from the aspect of production under the background of"supply-side structural reform",and obtain some achievements as follows:1).On the basis of research of the predecessors,this paper study when variable operating costs exists in an uncertain environment,and introduced cobb-douglas function with three parameters(production technology,capital cost and labor cost)to express the production function of the listed steel companies in china.Assuming the price of the target enterprise in M&A follows geometric Brownian motion,we get the valuation model of the target steel firm which we ruled out the bubble solution.And then through the numerical simulation proves the best point of m&a can be obtained by the proposed model.Given the present that the mainly factors influencing the operating cost is the cost per unit of raw materials,through the use of the numerical simulation,we found as the raw material prices rises,m&a price increases.2).Considering the practical game round number,under the condition of incomplete information,and suppose the estimated price which bidder gives submitted to the triangular distribution.this paper established the three phase bargaining game model.Use the model we can get the final M&A pricing in the process.In this paper,we give the game of interval is made by the third chapter,the ceiling is a valuation of the company and the lower limit is the underlying the fair value of the company,both sides bargaining to get the equilibrium in this region.Through the analysis of the model we can give a policy guidance to China's steel industry mergers and acquisitions,such as:give pressure to the m&a party or provide preferential policies to help the m&a in steel industry.3).According to the model we proposed,we imply empirical studies on bao wu M&A event.Firstly through the use of maximum likelihood estimation method and the use of the capital asset pricing model we get the parameter values in the model.And we get initial cost of the final merger acquisition pricing through assets appraisal standards.Compared the M&A pricing which obtained by the model with actual pricing,we found the pricing got by the model is higher than the reality,The reason comes from three aspects:first,the valuation based on the best spot for M&A,leads to overvaluation;second,this can be attributed to the selection of discount rate;third,the selection of synergistic effect coefficient is too high.From the perspective of government policy,the merger is supported by the government.And considering the supply side reform of our country and the steel industry under the background of"capacity",bao wu merger will be the trend of our country.And also,wu gang faces the great losses these two years,so it makes its bargaining power more weak,makes the final pricing below pricing model.This also shows that the model which promoted by this paper can be very useful to the mergers and acquisitions pricing in listed steel companies in China.All in all,this paper set the M&A pricing model of the listed companies in China,and carried out case analysis.This study enriches and develops M&A pricing theory,and it has practical guiding significance to the M&A pricing of China's listed iron and steel companies.