M&As Regulation, Cultural Enterprises Intangible Assets Valuation And Termination Of Asset Restructuring: A Multi-Case Analysis

In the context of industrial restructuring, the transformation and upgrading of traditional manufacturing, making cultural industry a pillar industry of the national economy has an important influence on stimulating economic growth. On the one hand, as public demand for cultural products increase, cultural products market has already formed. Cultural products market requires developing the cultural industry to meet consumer demand for cultural products. On the other hand, the government is fully aware of the importance of the development of cultural industry and makes a series of policies to promote the development of cultural industry.M&As as an important means of resource allocation, has become an important path for the corporate to grow into core cultural enterprises. The capital market has set off a wave of cultural industry M&As. Under the condition where the cultural product market has not formed maturely, by M&As, many listed companies decide to occupy the favorable ecological niche, avoiding the competition pressure from the niche overlapping. Synergies from M&As are the key to grow into core culture enterprises. In the process of merger negotiation, valuation of the target asset becomes the key point in M&As. And working as the core assets of the enterprise culture, intangible assets its own intangible character determines that intangible assets of the cultural enterprises evaluation difficulty is relatively large, due to the unfit of the current accounting standards for recognizing, measuring and reporting the cultural enterprises intangible assets and the restriction of evaluation method, when valuing the intangible asset, the corporate has great power to manipulate the assets'value. Coupled with the favorable policies, active market, many buyers tending to acquire cultural enterprises, the cultural industry M&As show "overvalued", "high premium" and "high performance commitment" "three-high" characteristics. The existence of "three-high" characteristics may lead to follow the trend of the market blindly, tunneling, generate huge goodwill impairment and other problems. It is not conducive to protect investor's interests, disrupting the order of the capital market, reducing the quality of listed companies. In the capital market, government departments, as one of the most important stakeholders, play the role of "supervision", requiring that in the process of M&As, listed companies should prove that the assessment of the intangible assets of the cultural enterprises with strong rationality, and the commitment to the net profit will be realized with strong evidence. As the innovation of the structure of M&As, regulatory policies does not block all the loopholes. Regulatory policies are required to make the appropriate adjustments to maximize the maintenance of the reasonable operation of the capital market.In order to study "overvalued", "high premium", "high performance commitment" "three-high" characteristics, which caused by the difficult valuation of intangible assets and regulatory policies how to influence the implementation of M&As strategy, the paper adopt a method of multi-case analysis:Tangdeyingshi acquiring Aimeishen, Baofengjituan acquiring Daocaoxiong and Wandayuanxian acquiring Wandayingshi. The paper indicates that due to the defects in the evaluation of the intangible assets, there are "overvalued" and "high premium" and "high performance commitment" "three-high" characteristics, and "three-high" characteristics are easily to induce regulatory inquiries. Listed company are required to offer full explanations and make enough information disclosure to prove that the assessment of the intangible assets of the cultural enterprises with strong rationality, commitment to the net profit can be realized with strong evidence. With 17 June 2016, CSRC (China Securities Regulatory Commission) issued the draft of "listed companies major asset restructuring management approach"; there are major changes in the regulatory environment for M&As of listed companies. With the stricter regulation, the cultural enterprises are active or forced to adjust its M&As plan. For example, there exists great uncertainty in making profit for Daocaoxiong, CSRC rejected Baofeng's M&A plan. Tangdeyingshi and Wandayuanxian also terminated M&As activity automatically with the same reason more or less.The conclusion of the paper is that the "three-high" characteristics easily result in the failure of M&As. With the tighter regulatory policies, the failure of M&As becomes higher significantly. In theory, the research enriches the study on the influencing factors of the failure of cultural enterprise M&As; in practice, there are great implications for cultural enterprise M&As and intangible assets evaluation:when implementing M&As strategies, top managers of cultural enterprises should assess their own capabilities, enhance the quality of information disclosure and fully consider the regulatory policies changes, avoiding the bad effect due to the changes in regulatory policies.