Study On Target Selection Of Strategic M & A Of International Contracting Company

Accompanied by the intense of competition on the international contracting market, strategic Mergers & Acquisitions (also known as M&A), which can construct, intensify or expand the core competence of company, is more and more used by international contracting companies in order to improve their competitive advantage on the market. Besides, target selection is the first step of strategic M&A, and the success of target selection plays a great role in the realization of the goal of strategic M&A. In this thesis, on the basis of the strategic M&A theory and the theory about core competence of corporation, the influence factors of target selection for international contracting company are analyzed and classified into four categories which are character of merger, character of target, company environment, and the synergic effect between merger and target. Further, how such factors affect target selection is analyzed, and found that the character of merger influences the goal of strategic M&A and determines the foremost criterion for target selection, while the next three categories of factors influence the future performance of strategic M&A and determine the specific criterions and evaluation standards for target selection. Moreover, the goal strategic M&A can be set by identification and evaluation of the core competence of merger; the character of target includes the target's industry character, operation character, law character, financial character and culture character; the company environment includes political environment, economic environment and industry environment; the synergic effect between merger and target could make synergic value for them. Then according to the principles and criterions of target selection for international contracting companies, an operational system of indicators for target selection of strategic M&A for international contracting companies, which is on the basis of influence factors, is built, and the grading standards for all indicators are given. In the end, based on the system of indicators, a quantitative model using PCA method, which can be used by international contracting companies, is built, and how to use the model is analyzed.