Research On Enterprise Value Evaluation Of M & A Target In China 's Petroleum Industry

At the beginning of the twenty-first Century, the sixth merger wave is sweeping all over the world, while the mergers and acquisitions happen everywhere. The range is getting more and more widely, some larger scale enterprise involves in, and the amount is bigger than ever. In the promotion of China’s fast economic development and the merger wave, the M&A market in China is showing a significant trend of growth, specially the petroleum industry.Over the last20years, China’s oil enterprises gradually marched oversea markets, and has made some achievements, in which, the CNOOC’s acquisition of CN Company is the most conspicuous. The amount is the biggest in history of China,15.1billion US dollars, and the influence is far-reaching. Although there have been some successful examples, China’s oil enterprises is still facing many problems in oversea mergers and acquisitions. Therefore, it is very important to accurately evaluate the target company. Only if the appropriate valuation method is chosen and the target company is evaluated reasonably, can truly help management to make right decision, to avoid risk, to bring more profit in the future. Then, how to choose the most appropriate valuation method is the main topic of this paper.This paper is divided into5chapters. The first chapter is the introduction, which puts forward the backgrounds and issues, domestic and international researches, the main research contents and methods. The second chapter summarizes the theory of mergers and acquisitions, value assessment, and an overview of the target company valuation methods. The third chapter introduces the development situation and characteristics of China’s petroleum industry international M&A. The fourth chapter, use the CNOOC acquisition of CN Company as an example, base on the ratio method, discounted cash flow method and comparable case method to evaluate CN Company. The fifth chapter is conclusion and prospect.This paper doesn’t only use theoretical analysis, but also discusses the case of CNOOC’s acquisition. With the combination of quantitative and qualitative, this paper expounds how to choose the right evaluation method to evaluate the target company, to help the management to make right decision, to avoid paying high premium, so as to obtain higher returns. Also, hopefully can this paper provide reference for the study of petroleum M&A, and the chosen of evaluation method.