Study On The Value Assessment Of RenJi Pharmaceutical Corporation In M&A

Abstract:The value assessment of enterprise is one of the most critical issues in the acquisition and merger behavior and the essence of M&A transactions. On the one hand, enterprise value evaluated provides the basis for pricing of merger talks, on the other hand, it helps to fully grasp and control of enterprise merger risk,avoid paying too high premium in order not to fall into a "M&A trap" and improve the success rate of final acquisition.This thesis takes the merge, RenJi pharmaceutical (Referred to as "RenJi Pharmaceutical") mergers JinRong Pharmaceutical Co Ltd (Referred to as "JinRong Pharmaceutical"), as an example. First of all, it describes the current background of the merge of China’s pharmaceutical enterprises and the practical significance of the valuation of M&A in pharmaceutical enterprise, analyzed the current research situation on this topic at home and abroad and determined the research content and frame of the thesis. Then, it introduced the concept of M&A, the theories of motivation and process of M&A, the concept, principles and methods of valuation. Secondly, it analyzed China’s macro environment (PEST), the present situation and prospects of pharmaceutical industry, the fundamental aspects of enterprises and the motives of merger of "RenJi Pharmaceutical ". with the comparison of the advantages, disadvantages and the applicability of different valuation methods, the thesis selected the discounted cash flow (DCF) method as the merger valuation of "RenJi Pharmaceutical". and it modified the basic model of DCF method in accordance with the actual situation of merger and acquisition enterprises. On this basis, according to the general process of merger valuation of DCF method, it analyzed the process of application of DCF method modified model in the merger and valuation in "RenJi Pharmaceutical" in detail. Finally, it analyzed the valuation conclusion briefly and put forward some related suggestions to perfect the merger and valuation of DCF method.18diagrams,33tables, and54references.