A Study on Valuation Assessment Methods in the M&A
|Keywords||M&A enterprise value synergy discounted cash flow model|
At present, China has become the third large market of M&A in the Asian-Pacific region and a focal point in the world. The first half of year ,the amount of M&A transaction achieves 41 billion US dollars, make the person surprising , the yearly Growth rate achieved 71% in 2006 year. The number of the public transaction is 857,the growth rate more than last year’s by 14.5% in 2005 year. To collect fund in the M&A, the scale in financial system also reaches a new height. The active M&A market in China has become a focal point in the world. During the course of M&A, the evaluation of the objective unit is one of the key problems, which is the trading marrow and the key factor to success and failure of M&A. Therefore, studying assessment methods on enterprise valuation has practice significance in our country.The text part, first introduces some theory and knowledge about M&A. Then it analyzes the source of the M&A valuation, it is synergy. Nowadays, the concept of synergy is still vague to the public, so this paper researches the synergy from the point of value increasing and uses some models to evaluate the synergy. According to its different sources, synergy can be divided into four types: operation synergy/ management synergy and financial synergy, especially intangible assets synergy. Chapter four discusses four kinds of assessment methods on enterprise valuation and carried out comparative analysis on it. The next chapter researches on the DCF model, among them it detailed analyze how to determine the discount rate, the increase rate and the cash flow. Then with a large-scale case study, this article elaborates on valuation of enterprise in the medicine industry by DCF model. Finally, the paper sets forth the questions existing in China’ needing perfect currently.