Real Options Or Winners Curse?

Under the current trend of economic globalization,cross-border m&a has become a main form of international capital flow,it also is important mode of the modern enterprise to the internationalization path.Companies face a broader market space and the huge market potential,at the same time,companies face fierce competition in the global range,the original market pattern is affected,the enterprises have to speed up the expanding scale,grab market share to enhance enterprise competitiveness,this has given rise to mergers and acquisitions.With the speeding up of economic globalization and the growing number of Chinese enterprises,more and more Chinese enterprises began to cross-border m&a as a new strategy of foreign direct investment,expand the international market,however,even on a global scale,the success rate of transnational merger and acquisition is not high.In this context,this study based on the theory of real option and the winner's curse,with case study as research methods,for the case of lenovo's acquisition of Motorola's mobile,trying to draw the target formation mechanism and influence factors of the value of the company.This study first extract important variables,and puts forward relevant propositions.Financial performance and strategic performance jointly affect m&a performance and m&a assets value uncertainty and managers overconfidence is involved.Mergers and acquisitions in the option value affects the outcome,the executives of listed companies,private income may affect the m&a decision,the above variables impact on mergers and acquisitions party the value of the company.Then combined with the case to interpret these propositions,from financial performance,turnover,and pretax profit know lenovo's strategic performance evaluation system to measure the building lenovo strategic performance,on the basis of information asymmetry and moral hazard evaluation of the acquired company MOTOROLA assets value uncertainty,from the managers in the past successful experience and leader's ambitions analysis managers overconfidence degree,to executive ownership and management influence inquiring the private benefits,through the enterprise development in growth period and the profitability of assets and now measure the assets quality and the option value.The above analysis will explain the value of the company,lenovo acquisition based on the theoretical framework of this article and casestudy results to the value of the company's growth of transnational m&a and puts forward some Suggestions.In this paper,the analysis shows that the value of the company after lenovo's acquisition of Motorola's reduced,encountered the winner's curse in this investment.Cross-border m&a happened after m&a performance is influenced by many factors,financial performance can reflect the performance of the enterprise in the short term,long-term development potential is more embodies in enterprise strategic performance,in addition to the uncertainty of asset value and the degree of managers overconfidence is negatively related to the m&a performance.In options perspective,with an option value to the growth of the company mergers and acquisitions with an option value of company liquidation,the growth of the value of the company after the merger is uncertain,and the company top managers may for private benefits and encourage mergers and acquisitions.