Merger and acquisition evaluation and decision making model |
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Authors: | Wen-Shiung Lee |
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Institution: | Department of Business Administration, Tamkang University, New Taipei City, Taiwan |
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Abstract: | Based on three merger and acquisition (M&A) methods and applying multiple-criteria decision making, the purpose of this paper is to establish an M&A evaluation model. The decision making trial and evaluation laboratory (DEMATEL) results show that the three business M&A methods possess interactive effect and self-feedback relationships. This study utilizes the analytic network process to calculate the weights of seven evaluation criteria; expected stock dividend is ranked as the most important criterion, followed by stock price/earnings per share, stock dividend growth, sales/market capitalization ratio, discount rate, replacement value, and liquidation value. This study uses Vlsekriterijumska Optimizacija I Kompromisno Resenje (VIKOR) to evaluate the performance of three Taiwanese banks. The results show that Bank B is the best M&A investment choice. Finally, the study establishes a comprehensive M&A decision making evaluation model. |
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Keywords: | multiple-criteria decision making model MCDM DEMATEL ANP VIKOR mergers and acquisitions |
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