Studies on the Decision-making with Applying Real Options to Multi-stage M&As

• Main Authors: HUNG-JUNG CHANG, 張宏榮
• Other Authors: Tyrone T Lin
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/8mv94v

碩士 === 國立東華大學 === 國際企業學系 === 96 === This study establishes the decision criterion of mergers and acquisitions (M&As) based on the consideration of M&A potential value under the multi-stage M&A procedure. This paper uses the case study and constructs a feasible valuation model of M&A potential value. Under each horizontal M&A stage, this study calculates the potential value at each stage respectively, and then the acquiring company can make “enter or exit” decisions based on the potential value information at each stage in order to set the optimal M&A strategic price in the negotiation procedure. Comparing the real options approach with the traditional valuation approach, this study finds that the negotiation mechanism existing in the multi-stage M&As can protect both sides and reveals that management based on the real options approach is more flexibile than that based on the traditional valuation approach. This study aims to evaluate the acquired company’s potential value at each M&A stage and actually present the acquired company’s value in order to serve as the reference basis of M&A price. In addition, if the acquiring company can swiftly decide the M&A price and finish the M&A procedure, the real profit will be higher than that of a multi-stage M&A. In the meanwhile, the M&A cost is relatively lower than that of a multi-stage M&A.