Research On The Reasons And Performance Of Ciwen Media Merges Zancheng Technology With High Premium

With the deepening of the reform of the cultural system,the cultural media industry has ushered in an unprecedented opportunity for development.The support and guidance of the CPC Central Committee's policies have even triggered a wave of M&A in the cultural industry.The high premium in M&A that accompany it has also aroused widespread concern.This article selects Ciwen Media's case of high premium M&A to research,and hopes to explore the causes of high premiums for listed companies and their impact on business performance,and to explore the company's valuation and pricing issues hidden behind high premiums.This article reviews literature of M&A motives,M&A premiums and M&A performance at home and abroad.Then it uses the theory of synergy and agency theory as the basis,combining the development history of China's cultural industry M&A and the institutional background of relevant laws and regulations selecting Ciwen merges Zancheng with premium as a case,analyzed the causes of the premium of this M&A and performance results.Among them,the research on the causes of M&A premiums starts from the four perspectives:the urgent motivation of the main-company parallel IP industry chain,the unconfirmed superior resources of the target company,the characteristics of the cultural enterprise,and the market competition.The analysis of performance mainly focuses on three aspects:market response,synergy and financial performance.The study found that:This merger did not achieve the synergy and financial performance that the main-company wanted,and was worth more than the high premium paid.The reason is that this M&A has the following problems:first,the strategy leads to invisible risks;secondly,the premium is too high;thirdly,cash payment and debt burden;and fourth,aggravating costs and difficulties in integration.In order to solve the above problems and provide reference for the subsequent M&A in the cultural industry,this article mainly proposes the following suggestions.Firstly,company should consider a variety of factors before M&A,to avoid the potential risks of hasty M&A;Secondly,for light asset company,country should take an effective method of accurate measurement to avoid the autonomy consideration leads to an overestimation of the price;in addition,the use of a combination of payment methods is considered to ease the pressure on M&A debt,such as cash payment,share payment,installment payment etc;finally,the main-company dares to undertake this risk of high premiums should also be supported by a series of risk control measures,including broadening financing channels,focusing on resource integration,and strengthening the control of funds.This article hopes to present these general recommendations to M&A of cultural industries through the study of this case,so that it can maximize the original intention of paying high premiums for M&A.