Pricing Strategy Of Mergers And Acquisitions

From 2003 to now, the global merges and acquisitions (M&A) have been hot again, a new tide of industry integrate has begun. Corresponding to the global M&A tide, China has become the hottest area in Asia, for both the quantity and the amount are in the lead.However, most of M&A in China are not the complete market actions but the governmental actions, which means the government transforms the state-run businesses by introducing capitals. An important reason is that M&A needs to be priced by market only, but in China, the pricing mechanism of M&A has not been mature: Most of research on pricing are qualitative analyses with a lot of artificial and random elements. The pricing method is almost limited in net-asset method, which will lead to an inaccurate price easily, as a result increasing the risk, and also making bad effect on M&A.For these reasons, I choose Pricing Tactic in M&A as my Master's paper, and will try my best to do something in solving the pricing problem. The whole paper involves four chapters, I wish it will be standard, systematic, integrated and deeply.Chapter One begins with the basic concept - business value, analyzing its implication, the factors which will affect people's understanding of it, the types of it under different conditions and hypothesis and the four levels that it acts in M&A. Then gets the main features of both sides of M&A by discussing the motives of M&A.Chapter Two discusses the means of payment of M&A and how to choose the means, then summarizes the main forms and features of China's M&A payment.Chapter Three which is the emphasis of this paper discusses how to determine the strategic space of M&A price – the highest price that the buyer could accept and the lowest price the seller could accept, especially discusses the Models of Stock Exchange Ratio under stock-to-stock form.Chapter Four which is the climax of this paper discusses the process of how the price reaches the equilibrium. Firstly, we analyze the general partial equilibrium in M&A; Secondly, we discuss the M&A game models – the First-price-sealed Bid Auction Model and Bargaining Model in detail, and introduce the Bidders Conspiring Model simply; Thirdly, we wish bring some lights to China's M&A from these above-mentioned rational analyses.