Study On Assessment Of Private Gas Station Enterprise Value In M&A

The "Gas Station Development Prospect Analysis Report" of 2018 pointed out that in the future,gas stations will develop in the direction of large scale,integrated services,intelligence and efficiency.With the increasing proportion of non-oil business and diversifying of energy types,Petro China,Sinopec,foreign oil companies,and state-owned energy enterprises have gradually started construction plans for large-scale integrated oil stations.Driven by the drivers of site layout,market strategy,and scale expansion,a wave of acquisitions of private gas stations has been set off.Chinese private gas stations have been facing problems such as brand effects,oil quality,instability of oil sources,and service quality.During the transformation,private gas stations lack support in many aspects such as funding,technology,management,and talents,and it is difficult to successfully transform by themselves.Thus private gas stations are also seeking opportunities for mergers and acquisitions.The acquired enterprise value analysis is the top priority of M&A activities,and adequate preliminary research is a powerful guarantee to reduce the risk of M&A failure.By establishing a complete enterprise value scoring index system,M&A entities can more fully understand the target of the M&A,identify problems,and exercise pre-control to reduce M&A risks.The application of non-financial indicators can also enrich the connotation of corporate value and supplement value evaluation methods.The author believes that the evaluation index of the M&A targets' value should comprehensively reflect the national regulatory requirements,industry trends,the motivations of the merger and acquisition,and the targets' own problems.Based on different M&A drivers,the value of the same target to different acquirers may be different,so the value assessment method should also be different.Therefore,the author applies the framework of balanced scorecard to score the M&A targets.On the one hand,this can help analyzing the value of the enterprise in multiple perspectives instead of financial perspective only.On the other hand,the concept of weighting and scoring can reflect the importance and contribution of certain indicator to the value of the M&A target.This paper mainly uses the methods of investigation and case study to analyze the project of a state-owned energy enterprise merging five private gas stations.The enterprise value of five gas stations is qualitatively analyzed and quantitatively scored and compared through the establishment of the enterprise value scoring system based on the balanced scorecard framework.The conclusion is that the value assessment of private gas station enterprises based on balanced scorecard can reflect the overall situation of the gas station comprehensively and help finding out specific problems,which can not only avoid the risk of M&A through all-round prior control,but also help the management of M&A targets.Finally,suggestions are put forward based on the research.When analyzing the value of private gas stations,the acquirer should pay attention to the comprehensiveness of the evaluation indexes.Private gas stations should ensure the quality of oil products,improve the service quality,and face the transformation challenges actively.Through this research,I hope to expand the literature and case data on the application of Balanced Scorecard in the value assessment of private gas stations,and make some contribution to the M&A activities of gas station industry.