Value Analysis Of Overseas Acquisitions Based On Real Options

In the context of the rapid development of economic globalization, The Chinese enterprises wish to join the global competition through cross-border mergers and acquisitions. In the face of the high-risk and high uncertainty economic environment, the real options method as an innovative tool for cross-border mergers and acquisitions value is very significant.In most of the country’s research focused on the study of real options for investment decisions and for the empirical analysis of cross-border M&A valuation is less, so this article is to expand this area. Firstly, the status quo of cross-border mergers and acquisitions of Chinese enterprises were analyzed, and the real option research at home and abroad were reviewed, the limitations of the traditional Chinese method of valuation, the introduction of Real Options. Real Option highlighted the value of M&A activity arising from the strategic level, but also stressed the enterprises for the uncertainty and risk of attention and treatment. It can be said, can provide a real option for the cross-border M&A companies to re-seize the opportunity to avoid risks and create valuable new perspectives and thinking.In this paper, the real option theory describes the system, and thus further introduces real option valuation method applied to cross-border M&A valuation applicability and effectiveness. Based on the theoretical analysis, this paper uses the case study method to Smithfield Shuanghui merger, for example, real option valuation method applied to the SFD is among the real options method in case of M&A business valuation provides a feasible of illustration, and finally he referred to the real options approach may be present in the actual application process problems and limitations...