Research On Option Value Of Qingdao Haier Co.,Ltd. Merger And Acquisition Of General Electrical Appliances

With the rapid development of market economy,cross-border mergers and acquisitions has gradually become an important method for enterprises to optimize resource allocation,expand overseas markets and enhance their own strength.The core content of cross-border mergers and acquisitions is the determination of transaction price,which is directly related to the success or failure of the transaction.Discount cash flow method is the most commonly used method in traditional appraisal value method,but it does not take into account the additional value of future market variability to enterprises,the value of the underlying enterprises cannot be accurately assessed,thus affecting the result of mergers and acquisitions transaction.The option right owned by enterprises in an uncertain environment is valuable which can be quantified and real options method can make up the flaws of the traditional method and offer a new value appraisal method for mergers and acquisitions enterprises.Firstly the thesis introduces the background and significance of the topic,the research status of relevant literature at home and abroad,the research content and research framework of the thesis.Secondly,it introduces the concept and motivation of cross-border mergers and acquisitions,the traditional valuation methods:cash flow discount method,basic pricing model of real options method:B-S model,the advantages and disadvantages of traditional evaluation methods and real option method,related theory of synergy effect in mergers and acquisitions.Thirdly,it explains the feasibility of real option method in enterprise valuation,the B-S model and the determination method of relevant parameters in detail.Finally,it chose the case of Qingdao Haier Company's acquisition of the household appliance business of General Electric and added the results gained by the discounted cash flow technique and the real options method as the overall value of General Electric household appliances Meanwhile,it used the real options method to calculate the option value of synergy effects in purchase,research and development,market and supply chain after merger and acquisition which were 151.66 million USD,40.95 million USD and 36.81 million USD respectively.The annual report of 2018 shows that a few years after merger and acquisition have indeed generated synergy value which is higher than expected.The research method of this thesis fills the shortcomings of traditional appraisal method and provides basis for appraising the options value of synergy effects at the same time,which offers a new field of vision for value appraisal of overseas subject enterprises and investment decision-making in going concern after the merger and acquisition in the future,and provides a more scientific and reasonable method for the value research of Chinese enterprises' cross-border mergers and acquisitions.