Research On The Value Evaluation To Target Enterprise In M&A

With the speeding up of the globalization and the rapid development of our economy, more and more enterprises to grow, and even abroad. In such a scenario, mergers and acquisitions become one of the most effective way of the development of them. Since entering the 21st century, a new wave of mergers and acquisitions, global mergers and acquisitions is rising. In China, in recent years, the rapid economic development and acceleration under the background of industry consolidation, the M&A market of our country have appeared in the booming growth, Mergers and acquisitions activity and transaction amount has made history records.In enterprise M&A hot at the same time, the enterprise value assessment, the key issues in the M&A also caused people to focus on. In western countries, the theory of enterprise value assessment after a long period of development, has formed a relatively mature theories and methods. Asset base method and income method and market method was widely accepted is the three main methods of enterprise valuation. In China, asset appraiser in enterprise value assessment, when choosing evaluation methods, usually choose asset base method and income method is given priority to, the use of market approach are relatively few. However, in the western developed countries in valuation practice, market approach has been widely used. Market approach as the most objective and fair valuation method, because of the influence of such factors as the market environment in China is not widely used. Along with our country capital market gradually perfect, the rapid growth of the merger and acquisition activity, I believe that market approach in the future, will be more use, it is necessary to further study the application of the market approach.Arranged at first, this paper analyzes the domestic and foreign scholars’ achievement in recent years that based on the enterprise value evaluation, simple summarizes the M&A theory and value theory. Then, this paper introduces three methods of evaluation-asset based method, income method, market method, and discusses the present situation of the application of enterprise value assessment method in mergers and acquisitions, asset base method and income method using the most, but still there will be a high premium. the use of market approach in practice is relatively small, More is have the effect of simple auxiliary validation, did not make it the most fair and objective advantage into play. Then, further discusses the several key problems of the current market method when use, the choice of comparable companies as well as the choice of value ratio and adjustment. On this basis, through a specific case of mergers and acquisitions, market approach assessment process, was introduced in detail, and how to choose the comparable companies, how to adjust the value ratio, etc. On this basis, finally reached their own conclusions, and puts forward some feasible Suggestions.I believe that, with the development of China’s capital market and perfect, also will be more and more extensive application prospect in the market method of, so we must combine the actual situation of our country, more attempts to use the market method, accumulating experience, continuous improvement, gradually improve the use of market approach.