Research And Case Study On Cross-border M&A Valuation Of Advanced Manufacturing Industry Based On Option Binary Tree

Under the background of the development of big data,Internet of Things and artificial intelligence,new high-tech industries are growing.In this process,the advanced manufacturing industry has also maintained a rapid development trend,and a new pattern of global advanced manufacturing development is taking shape.In order to break through the "bottleneck" of the development of manufacturing technology and accelerate the development of high-end manufacturing,China has formulated the "Made in China 2025" strategic plan in combination with its national conditions.In this context,China’s advanced manufacturing enterprises have turned their attention overseas after their development and growth,aiming to quickly achieve strategic goals such as resource integration,technology upgrading,and improving the industrial chain of enterprises through cross-border mergers and acquisitions.However,it is not uncommon to fail in cross-border M&A,in which the M&A company blindly increases the M&A price,resulting in a high premium,which may eventually lead to M&A failure.Therefore,when China’s advanced manufacturing enterprises carry out cross-border mergers and acquisitions,how to choose appropriate valuation methods and scientifically evaluate the value of the acquired enterprises is particularly critical.Taking cross-border M&A of advanced manufacturing industry as the research object,the first half of this paper analyzes the advantages and disadvantages of various enterprise value evaluation methods in evaluating cross-border M&A of advanced manufacturing enterprises from a theoretical point of view,combining the theory of enterprise value evaluation,the characteristics of advanced manufacturing industry,the development status of China’s advanced manufacturing industry,and the current situation of cross-border mergers and acquisitions of advanced manufacturing industry.Conclusion: At present,the traditional valuation methods adopted by China’s valuation institutions have certain limitations in the face of cross-border mergers and acquisitions and special industries such as advanced manufacturing.At the same time,the comparison highlights the characteristics of the option binary tree model in quantifying the value of uncertainty and reflecting the flexibility of enterprise decision-making,which shows its superiority when applied to cross-border M&A in advanced manufacturing.The second half of this paper introduces the case of Midea’s acquisition of KUKA as a typical case of cross-border M&A in advanced manufacturing,and uses the market method and option binary tree pricing model in the traditional valuation method to estimate the value of KUKA Group,and compares and analyzes the results,and tests the applicability of the option binary tree model in cross-border M&A in advanced manufacturing industry.The contributions of this paper are:(1)for the first time,the application field of the options binary tree model is extended to advanced manufacturing.(2)The valuation analysis is carried out comprehensively and from multiple angles in the form of a single case,and the applicability of the option binary tree model to cross-border M&A in advanced manufacturing industry is demonstrated at multiple levels from both theoretical and case aspects.