A Case Study on the Valuation of Merger and Acquisition of Taiwanese LED Company-Epistar Company Mergerd Epitech Company

• Main Authors: Fang-Kuo Li, 黎方國
• Other Authors: 吳青松
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/76812248450373899778

碩士 === 國立臺灣大學 === 國際企業管理組 === 96 === This research was focused on the calculation of reasonable merger prices for one Taiwanese LED company Epitech, which was merged by another company Epistar which was also in the same LED industry. This study used two different financial calculation methods, Free Cash Flow Discount (FCF) method and Market Multiple Method, to evaluate the reasonable merger prices. The results of calculation showed that the reasonable merger prices were NT 35.72 by the FCF method and NT 27.38 by the Market Multiple method, respectively. The average price from these two methods was NT 31.55. Comparison with the real merger price, NT 34.40, there was a littlt premium by 9.03%. The Epistar company , the largest LED Epi-wafer company in Taiwan, has strong financial condition, good R&D ability, high production yield and advance technology, but the Epistar still provided the higher price with about 9% premium to merge the relatively weaker company Epitech.We explained the reasons why Epistar paid the higher price to merge the Epitech by three different dimensions of synergy. In conclusion, we think the merger price is reasonable, and the Epistar can get some benefits from this M&A, and we believe this M&A is helpful for Epistar to create more competitive and prospective future.