Abstract
The research using a M&A case study of two Taiwan analog IC companies, A and F, to identify the motivation of the M&A and to evaluate its share exchange ratio rationality. The in-depth interviews and analysis results show that the changing industry and market structures, the domestic competition pressures and international growth opportunities are the main environmental motivations to the M&A. It also identifies the organization humen resource complementarity, industry horizontal integration, market and channel acquiring, business and product diversification and international expansion are the internal motives in two corporates. Furthermore, it is expected to create various synergies through the integration of two companies after the merger, and to improve business performance for enhancing the company’s return on equity and market capitalization of the enterprise. The result using the Discounted Free Cash Flow Method (DCF) to assess M&A’s share exchange ratio agreement shows that the value of Compant A is underestimate. It implies that the final agreement to the deal is not entirely based on the discretion on quantitative enterprises evaluation mothodes but rather on the expecting synergy and opportunity after consolidation.