A Appraisal On Evaluation Risk In M&A In China

In the process of M&A(Merger & Acquisition), the inaccurate estimation of target enterprise's value because of information asymmetry conclude two aspects, one is financial situation deterioration and finance achievement loss caused by overestimation of coordinated effect, the other is the failure of M&A and the loss of ahead investment caused by underestimation of target corporation. Both of the possibility and uncertainty of these two conditions are called the evaluation risk of M&A, it is not only integrated reflection of all risks in M&A but also an important influence factor of success.First, a concrete analysis of the causes of the evaluation risk in M&A is made in this paper (mainly including localization and untruth of financial reports, information asymmetry, faultiness of evaluation methods, lag of agency institution development, etc.).Then Fuzzy Comprehensive Evaluation Model, Artificial Neural Network Model and Value at Risk Model are compared with each other, it is believed that VaR Model fit the appraisal on evaluation risk in M&A best. Finally a M&A cases is analyzed with BS(Black-Scholes) formula and VaR Model and several corresponding countermeasures to the control of the evaluation risk in M&A are put forward.The economics mathematics research approach is mainly used in this paper, to quantize and appraise the evaluation risk in M&A, including the BS formula, Fuzzy Comprehensive Evaluation Model, Artificial Neural Network Model and VaR Model. The innovations of this paper are: the BS formula is brought in to estimate the value of targeted corporations in M&A, the main causations of evaluation risk in M&A are analyzed in an all-round way, the VaR Model is brought in to appraise the evaluation risk in M&A, two cases of M&A are analyzed with this two models, some suggestions are pointed out to keep the evaluation risk in M&A away.