When doing M & A, companies that become buyers need to obtain various information and compare and examine. One piece of information that should be confirmed is “Buyer’s Value”. So what kind of information is Buyer’s Value? It is information that shows the value of the company that is the seller who is selling the company is worth the buyer side. The higher the buyer’s value, the more valuable it is worth buying the seller’s company. And if Buyer’s Value does not exceed the seller’s corporate value (so-called seller’s value), M & A will not be theoretically achieved.
How to calculate Buyer’s Value
Although it is a method of calculating buyer’s value, approximate it by adding value such as synergy value that can be obtained by a company that becomes a buyer and asset or material that may produce profit to the appropriate market value given by objective evaluation. How to calculate buyer’s value is not easy. Indeed it can be said that objective calculations can be made from the assets and capital of the company that becomes the seller about the fair market value given by the objective evaluation. On the other hand, the synergy value depends on the capital and assets held by the company that will become the buyer, so it is not easy to calculate objectively. As for this aspect of synergy value, it will be decided by both seller side and buyer side claims. Therefore, the final buyer’s value in M & A is calculated as a result of negotiations. As a result of negotiations, if buyer’s value seems to be low, the buyer side may decide that there is no merit of M & A, so negotiations for deciding buyer’s value are considered to be very important negotiations.