Research On The Recognition Of Asset Evaluation Results In Mergers And Acquisitions

In recent years,thanks to policy support,merger & acquisition(M&A)activities have become more and more frequent.In view of the huge demand for M&A,the asset evaluation industry has developed rapidly and is playing an increasingly important role in the M&A process.As more and more voices call for fairness in M&A activities,more and more attention is paid to the objective and fair issue of asset evaluation.From the perspective of the capital market,this paper first studies the market response of the asset evaluation results,in order to find a method to identify the rationality of the evaluation results.It also studies the recognition of evaluation results by both parties of the M&A.From the perspective of information asymmetry,it specifically studies the relationship between the employer of asset appraisal agency and recognition of evaluation results by both parties of the M&A and its relationship influencing factors.The paper is mean to obtain the reasons for different recognition of the evaluation results by both parties in the merger and acquisition.This article begins with a review of relevant literature,and uses the theory of value evaluation,effective capital market hypothesis,and the theory of information asymmetry as the basis for analysis.The relationship between the results of asset evaluation and market reaction and its influential factors,the employer of appraisal agency and M&A trader's recognition of the evaluation results' relationship and its influential factors were analyzed logically by a theoretical analysis framework.Secondly,taking Shanghai and Shenzhen Stock Exchange's major merger &acquisition activities from2007 to 2018 as samples,the hypotheses proposed by theoretical analysis were empirically tested through multiple regression analysis.The study found that:(1)Compared with the industry level,the more abnormal the asset evaluation's value-added rate is,the worse the market acceptance is.In other words,there is a significant negative correlation between abnormal value-added rate in asset valuation and market reaction.(2)The nature of property rights and the institutional environment also affect the market recognition of the assessment results.When the evaluation agency hires a non-state-owned enterprise and its registration area institutional environment is good,the market response is worse than when the enterprise is state-owned and the institutional environment are poor.(3)Compared with the target(seller)employing an asset appraisal agency,when the acquirer(purchaser)employs an asset appraisal agency,the more its evaluation value will be used as the basis for the pricing of M&A,the more it will be recognized by bothparties means smaller of difference between the M&A transaction price and the assessed value.(4)The external governance of the appraisal agency employer and the reputation of the asset appraisal agency have a moderating effect on the relationship between evaluation agency's employer and traders' recognition of appraisal results.The greater external governance of the employer and the high reputation of the asset appraisal structure can both reduce the impact caused by asset evaluation agency's employer's identity and increase trader's recognition of appraisal results.(5)The entity's registration area institutional environment impact the relationship between evaluation agency's employer and traders' recognition of appraisal results.When the institutional environment is good,the appraisal results will be more recognized by both parties.Finally,in order to promote the rationality of the asset evaluation results and the recognition of the evaluation results by both parties in the M&A,the paper put forward some related suggestions such as establishing a database of asset evaluation results and improving the appointment institution of asset evaluation institutions.