Research On Objective Enterprise Pricing In Merger & Aquisition

With the development of economy, Merger & Acquisition (abbr. M&A) emerges one after another. Objective enterprise pricing is the key of M&A, related to each participator's profit and the M&A's success or failure;and value assessment is the key of pricing, providing basis for trade price's determination. However, present value assessment technique often neglects the value of M&A's flexibility, so it is of great meaning to do research on objective enterprise pricing in M&A taking value assessment as the score.Based on value analysis of objective enterprise in M&A, objective enterprise's value assessment and trade price's determination is studied in this thesis. It is concluded that the value of objective enterprise in M&A includes independent value and additional value. The objective enterprise's independent value is the sum of its real assets value calculated by Discounted Cash Flow method and its option value calculated by option pricing method; the additional value is the sum of M&A's real option value calculated by compound real option pricing method and the part of M&A's synergy value which can be calculated by Discounted Increment Cash Flow Model or Stock Yield Theory Computation Model and allocated by Analytical Hierarchy Process and Expert Point Way. On the basis of assessment value, the merger's maximum purchasing price and the object's minimum selling price initially forms M&A's price interval; the merger's maximum negotiation bid and the object's minimum negotiation bid forms negotiation bid interval; the objective enterprise's trade price is finally determined by First-Price Sealed Auction or Bidder Conspires Theory or Bargain Tactics, according to the different constitution of M&A market. This research's result can provide a solution for objective enterprise pricing in M&A.