Research On The Valuation Of Midea M&A KUKA

Since 2015,the international market has been complicated,the macroeconomic recovery has been slow and the growth momentum has been insufficient,many companies are facing a crisis of slow business growth,falling profits,and even bankruptcy.After the outbreak of the financial crisis in 2008,the sales of Chinese home appliance enterprises fell sharply.As the economy recovered,the household appliance market showed a good development situation.However,since the second half of 2014,the entire industry has once again experienced a downward trend due to economic impact,and the growth rate of operating income has declined significantly.Household appliance enterprises are at a critical turning point from maturity to recession.Facing with the double pressure of macroeconomic downturn and slow development of enterprise,China's home appliance enterprises are in urgent need of transformation and upgrading.At the same time,with the proposal of the “Made in China 2025” strategy in 2015 and the state's support for the robot industry policy,the mergers and acquisitions of China's home appliance industry giants such as Midea,Gree and Haier accelerated.In May 2016,Midea Group paid 115 Euros per share for KUKA of Germany.In January 2017,Midea acquired 94.55% stake of KUKA and promised to maintain the independence of KUKA.So far,the merger has been completed in the past 8 months.This paper takes the case of the Midea acquisition of KUKA as the research object,combined with the current development status of household appliance enterprises and robot enterprises,and conducts case analysis from four aspects including the timing of merger and acquisition,national strategy at home and abroad,merger and acquisition motivation of Midea and KUKA motivation,so as to further evaluate the enterprise value of KUKA.In this paper,the valuation of KUKA enterprises is analyzed by the comparable company method and the comparable transaction method in the relative valuation method.The rationality of the US KUKA price is explained by the enterprise value multiple,the price-earnings ratio and the comparable transaction premium.This paper draws the following conclusions:(1)The reason why Midea chooses to acquire KUKA is that the opportunity is underestimated due to the economic downturn,which isstrategically driven by the made in China 2025 strategy and the Midea's dual intelligence strategy.(2)Due to the adequacy of comparable corporate information in KUKA in the market,the target company value can be better evaluated through the comparable company method and comparable transaction method,and the results show that the acquisition price of KUKA is reasonable;(3)although the premium rate of Midea's acquisition of KUKA is about 36%,the premium level of KUKUA is appropriate considering the national requirements for the transformation and upgrading of the household appliance industry and the strategic layout of its own enterprises.The research contribution of this paper is to conduct a comprehensive and multi-angle valuation analysis in the form of a single case to provide solutions for the transformation and upgrading of household appliance enterprises;through the analysis of the target enterprise valuation,it provides valuable reference for the future enterprise valuation method and price determination.