An Simulative Study of Exchange Ratio Determination Model For the M&A in IC Packaging and Testing Industry
After many years¡¦ M&A, the IC Packaging and Testing Industry show the trend of ¡§The big ones get bigger¡¨. The mainstream management styles of Packaging and Testing industries that run apparently into high capital intensity are the conglomerate by subsidiaries, or virtual group through M&A or equity investment. Under the inferiority of limited resources and cost competence, the small medium size of Packaging and Testing factory face the merged future. Therefore, it should find some adequate survival strategy.
Under current circumstance, the fastest method for facing the powerful competitive pressure is M&A. Due to the fact the capital of IC Packaging and Testing are huge, and most stocks have been went public, the most available method of M&A is the share-for-share Exchange or mixed payment by cash or common stock. If it involves the common stock exchange, the study for exchange rate will become very important.
This study is aimed at the related problem of share for share exchange. We use the Share-for-share Exchange model developed by Larson and Gonedes in 1969 as the basis and do some extension. We also use the dividend behavior decrease model developed by Marsh and Merton in 1987 to resolve the P/E ratio estimation problem simultaneously. The researched objects are Siliconware Precision Industries Co., Ltd ¡BGREATEK electronic¡B and IST International Semiconductor Technology Ltd. Besides, this study will also do small change in L-G model to suit the merger problem of the three IC Packaging and Testing companies.
The result shows that the reasonable negotiation of share-for-share exchange by L-G model can provide both sides a negotiated or mediated bottom line and also imply that this message will provide substantial assistance for both sides.
Advisor:Chau-Jung Kuo; Miao-Ling Chen; Feng-yu Ni
School:National Sun Yat-Sen University
School Location:China - Taiwan
Source Type:Master's Thesis
Keywords:exchange ratio share for packaging and testing industry m a
Date of Publication:05/29/2006