Valuation In The Merger

With the development of Chinese economy, the deeply reform on stockholder's rights and the globalization of economy, M&A becomes more and more popular. Enterprises have much higher requirement for valuation, which makes the understanding of valuation deepen gradually in this process.The concept of value is the foundation to determine valuation models. By expounding the history of value theory and the development of different value theories, this article elaborates on the concept and the influence of value in M&A, as well as it's meaning, supposition, goal and object. The article also elaborates the four basic models of value appraisal: Model of costs, Model of relative comparison, Model of discounted cash flow and Model of option evaluation, and their respective application domain.Valuation for M&A and other property valuation methods share some common characters. With the synergy effect and the corporate control, also with the different values and fields of vision by purchasers and bargainers, valuation for M&A also has certain particularity.This article focuses on: the application of valuation models in M&A; how to value the management synergy effect and the financial synergy effect after the consolidation of two corporations; how to evaluate the reorganization on the management level to the target company (the control of target company); how to produce the value reduced effect with the behavior of both vendor and purchaser; common deviation and mistakes in value appraisal. With case study and theory analysis, this article emphasizes on the concrete utilization of synergy effect, corporate control and valuation method.