A hybrid knowledge-based decision support system for enterprise mergers and acquisitions

Abstract

This paper presents a hybrid knowledge-based decision support system for enterprise mergers and acquisitions. The HKDSS system provides not only practical merger and acquisition procedures, related regulations, and legal problems but also feasible solutions or actions through the performance of rule-based reasoning. The hybrid system integrates a database, case base, rule base and model base to create a tool that managers can use to deal with decision-making problems via the Internet. Rules in the rule base are explained here in detail to illustrate the process of reasoning, and four practical cases in the case base also used to show how a case can be dealt with as a new case arrives. In order to evaluate a business's value, a discounted free cash flow model and economic profit model in the model base have been developed. Finally, a scenario analysis is employed to show how the user can deal with an uncertain growth rate and present value.