Appraisal On The Mergers And Acquisitions Of “A” Geo-Mineral Engineering Group Co, Ltd

Under the environment of economic transition, more enterprises choose to take the activity of mergers and acquisitions(M&A for short).Mining is the basic industry of national economy. State-owned geological prospecting units also enhanced its competitiveness by listing and restructuring.Valuation is the core of listed companies’ M&A. Internal control is the guarantee of validity of M&A process. But there exists tunneling in the M&A of state-owned geological prospecting units. In order to solve the above problems, from the view of internal control, the valuation of M&A and tunneling of state-owned geological prospecting units were discussed.First of all, the concept of enterprises’ valuation of M&A,internal control and tunneling and the related theory of neoclassical economics, economic cybernetics and theory of commission and agency was introduced. The relations between valuation of M&A and tunneling were analyzed from the view of internal control. Secondly, the industry characteristics of mining, the basic situation of relevant stakeholders and the basic situation of the listing and M&A process of “A” Geo-Mineral Engineering Group Co, Ltd and its internal control were analyzed. Then the two M&A activities of AGM were analyzed. And in the case of AGM, the problems concerning relevant stakeholders,valuation and internal control were analyzed.After analyzing related data and events, it was found that virtual high valuation of M&A and internal control expires existed in the M&A and appraisal process. The above problems led to AGM paying extra tens of millions of acquisition cost. It is indicated that there may exist inside tradings such as tunneling in the case. Then it is suggested that in the M&A process, the mining enterprises should improve the valuation of target firm, improve the level of internal control and enhance the supervision of M&A process.