Issue: №9/1, 2019
Introduction. The Ukrainian M&A market is very small in volume but has very high prospects for development. For the sake of transparency in this market there should be, for the first time, a method of honest valuation and audit, as well as an ethics of the operation of the merger and acquisition market. For fair valuation, there are various valuation strategies and methods that need to be implemented into the market, namely (DCF, Multiplicators, Fundamental & Technical Analysis). Purpose. The purpose of the article is to explore the concepts, strategies and methods of valuation in mergers and acquisitions. Results M&A in Ukraine, as a process, is a new phenomenon, which suggests the emergence of a structure for this process, and new world standards for this very event. Let's look at the primary characteristics of the term M&A, and what it means: “Mergers and acquisitions (M&A) is a general term that refers to the consolidation of companies or assets through various types of financial transactions.” The methods of M&A vary depending on the purpose of the company which absorbs, for the best understanding, of these processes there are a different method, horizontal, vertical etc. The most common method is to look at comparable company or valuate it in one of these methods: Comparative Ratios, Price-Earnings Ratio (P/E Ratio), Discounted Cash Flow (DCF).” Process of M&A deals can hedge a lot of risks, and can save business from different problems, such as hostile acquisitions, bankruptcy, high taxes and antitrust law. Conclusion. The Ukrainian M&A market is very small in volume but has very high prospects for development and situation with this market in the case of Ukraine may serve as green or red flags for foreign investors, and the more transparency the market will provide, the valuation of companies and the publicity of the process, the more attractive the Ukrainian economy will look to private investors. References 1. Investopedia M&A definition Investopedia. 2019. URL: https://www.investopedia.com/terms/m/mergersandacquisitions.asp 2. McKinsey “6 types of successful M&A”. McKinsey Insights. 2019. URL: https://www.mckinsey.com/business-functions/ strategy-and-corporate-finance/our-insights/the-six-types-of-successful-acquisitions 3. Latos P. Ukrainian M&A continues to build momentum following another year of double-digit growth: KPMG Report 2019. URL: https://home.kpmg/ua/en/home/media/press-releases/ 2019/02/ukrainian-ma.html 4. ArcelorMittal Kryvyi Rih (Kryvorizhstal). 2016. URL: https://lb.ua/file/company/3472_arselormittal_krivoy_rog.html (in Russian) 5. What are the Main Valuation Methods? CFI Education Inc. 2019. URL: https://corporatefinanceinstitute.com/resources/ knowledge/valuation/valuation-methods/ 6. Concorde capital investment conference 2019. 2019. URL: https://biz.nv.ua/markets/ukrainskie-oligarhi-ob-ekonomicheskoy -situacii-razvitii-biznesa-i-prezidentah-50021937.html
Keywords : М&A deal, investment banking, deals strategy, valuation, deal closing, P/E ratio, DCF, mergers, acquisitions, consulting & advisory