Although the game of corporate mergers and takeovers has been played for many years, it seems that very few acquirors are able to perfect the skills necessary to "win" consistently at the game and capture the profits associated with successful combinations. This research report concerns one of these skills. It aims to examine various considerations involved in evaluating candidates for corporate mergers and acquisitions. Special emphasis is on the processes of value and price determination. The essence of the discussion is to build up a framework to help ensure that acquirors are led on the right track to evaluate their targets. This report begins with a review of empirical studies and past experience which supports that accurate valuation and pricing are critical factors for a wealth-creating acquisition. Different valuation methodologies and pricing approaches are then analysed. The report concludes that valuation and pricing are two distinct but complementary issues in the process of acquisition evaluation. In sum, valuation, placed on a target for which a takeover will be extended, forms only part of the basis of the acquisition price. A premium will be paid so far if the benefits created by the combination is greater than the premium itself.