Value Creation In Mergers And Acquisitions Financial Resolve

The value creation is enterprise executive's mission. It is a sign of capability of enterprise existing and developing, also the core of financial managing. Mergers & Acquisitions is often used as the run method of capital and is the service of enterprise strategy. The ultimate aim of M&A is to increase enterprise value. Financial analysis is used to study the value creation in M&A, on the one hand that can reveal the innate characters and make it easy to analyze and judge win or loss in M&A, on the other hand both managers and stockholders also think that it is a directly scientific method. Compared with traditional theories, it is completely new.This paper is comprised of four parts.PART ONE, The general analysis in M&A.This part gives the definitions and classifications in M&A and analyzes it's the characters and situations in the world and in China nowadays, and that, shortly outlines the general analysis in M&A.PART TWO, The financial managing core of in M&A is enterprise value theory and models.This part studies the achievements that oversea and domestic scholars have done, points out their shortcomings. After systematically introducing the core of enterprise value theory, gives the essences of EVT, in other words, because the value determinants that include future cash flows and cost of invested capital can be affected by M&A, so it can create value. As the theoretical basis, there are three models of cost of invested capital, discounted cash flows and market value creation.PART THREE, The financial analysis in M&A.This part from different perspectives influencing enterprise value creation in M&A, step by step a whole method that is a financial analysis of value creation in M&A is shaping up, with explaining of cases, finally derives the criterions of assessing value creation in M&A.First, after comparing the relations between M&A and strategies, this article thinks that M&A is a tactics, and gives enterprises financial characters. Second, focuses on estimating of future cash flows, concludes several useful ways and concepts of the value creation in M&A. Third, financial analysis used in paying and financing of M&A, there are different results in different ways. Fourth, after differentiating cost and expenses, concludes some important basic concepts of cost in M&A. Fifth, from the value creation angle, studies risks, for example financial risk, premium risk and arbitrage risk in M&A. Sixth, discusses accounting and taxing in M&A and carefully distinguishes the results of pooling-of-interests accounting and purchase accounting. Seventh, there is the most important conclusion in the theory, the criterion of success or fail in M&A is increasing or decreasing market value added. Eighth, reaches to an end with cross-border M&A and alternatives.PART FOUR, The classical case: the empirical researching of the M&A case of DaimlerBenz-Chrysler.This part using above financial analysis method of value creation in M&A empirically researches the consolidation of DaimlerBenz-Chrysler, and assesses the outcomes in short-term and mid-term. Finally, gets some useful conclusions of value creation from studying the case.