Analysis Of The Case That Ping An Mergers Shenzhen Development Bank

Recently, the regulations of banking and insurance firms’equity investment have been released. Based on this circumstance, it is possible for banc assurance mergers in China’ capital market.The fact, PINGAN has been the controlling shareholder of Shenzhen Development Bank, has opened a precedent for a national commercial bank being hold by a insurance firm. This event has a huge influence on China’s capital market, and it has been the largest merger in the history of China’s A-share market. Because of involving huge amount of money and the mixed operation, this merger had drew a lot of attention, including regulars. And whether the merger can be successful or not has caused concern by different parties. According to Michael Bradley, Anand Desai and E.Han Kim’s research in1988, a successful merger can make the target company and acquiring corporation’s value increased by7%. However, M&A has always been alone with risk. A lot of merger cases had failed, including those profound experience one and world-class company. So it is critical to analysis this important M&A in China. This essay has analysis the entire merger, aiming to predict the merger and give some recommendations.After describing the entire process of merger cases, the analysis focused on the motivation, as well as result of mergers and acquisitions by using quantitative and qualitative analysis methods. With a lot of comparative analysis, descriptions, and highlighted the synergies of the acquisition motivation. Use the discounted cash flow method, the relative value, and the total market value of the ordinary shares to judging for the merger result. And make sure that a variety of methods are able to draw a more comprehensive assessment of enterprise value. Finally, through a lot of analysis, I have found that after the merger the enterprise value significantly greater than both the value of the pre-merger, and from the point of view of the qualitative analysis of the evaluation of the merger case is also very positive. But those evaluations are only based on short-term operating results and include many hypotheses and assumptions. All in all, I just have a high expectation on this merger, but still can’t give a conclusion.