Research On The Choice Of Target Company In M&A Based On Core Competence

With the rapid development of the China's economy and the perfection of capital market, M&A, as a form of financing and market competition among companies, plays a more and more important role in accelerating the congregate of social capital, bettering the structure of capital reserve, modulating industry organizations and industry structure and improving enterprises' competitive force. It is said that the demand of M&A inside and between industries is very fierce in our country nowdays. However, the performance of domestic M&A is not very good. According to the experience of western countries, the unpropriate choice of target company is a very important one among the plentiful elements leading to the failure, weather the company make a right choice or not will determine success or failure.This dissertation stands in the position of enterprise and studies the choice of target company in M&A by means of core competence in microcosmic angle. Firstly, the dissertation introduced the related theory of the core competition and choice of the target company, then combined them to propose that if the enterprises wanted to cany on M&A activity, they must take the core competition as the starting point, and obtain the unceasing strengthening and the promotion along with the process of M&A. Secondly, the dissertation gave the analysis system and general procedure of the choice of target company based on the core competition. Then, it analyzed the relationship between the synergy effect and core competition, and gave the evaluation system based on the synergy effect, then fuzzy DEA method was used to appraise several target corporations, and choose the best from them. At last, it took a case as an example to apply the method to choose proper target company.This paper combined the theory of the core competition and choice of target company, then gives a model on how to choose the proper target company form the angle of synergy effect.