The Financial Analysis For The Choosing And Pricing Of Target Enterprise In Merger And Acquisition

As an important channel for corporation to boost up the life-force, increase efficiency, and expand the scale, M&A has been approbated all around the world. According to economic history of the whole world, up to now, there have been four big merger tides presented, and we are now being placed in the fifth merger tide. In China, M&A was developing remarkable, the total amounts of M&A deals are increasing in China recent years, while which of the whole world are decreasing. M &A in china has become a focus in the fifth merger tide. M&A deals between Chinese and global companies have been more and more frequent. Under this background, studying in M&A makes great sense.Accompanied with the high frequency of M&A deals, failure rate is always high. According to the investigation, it is about 50% to 80%. There are three main reasons, improper choosing of target enterprise, high paying price and unsuccessful integration after merger. So, in order to guarantee the M&A successful, firstly, right decisions about the choosing and pricing of target enterprise are absolutely needed.Setting the M&A epoch as background, this paper is studying about the choosing and pricing of target enterprise. Based on the strategic plan, decisions about the target enterprise choosing are made not only by qualitative analysis, but also by quantitative analysis through enterprise evaluation methods. Referring to the synergy value and dealing fees, the highest price which the buyer could accept and the lowest price which the seller could accept can be worked out. Furthermore, by evaluating some important influencing factor, the highest and lowest acceptable prices are adjusted to figure out a set, which can supply useful information for decision making in M&A.