A Case Study Of Corporate M&A With Performance Compensation Commitments In Gambling Agreements

The wave of mergers and acquisitions started in 2013.After several years of development,mergers and acquisitions have provided great help for listed companies to integrate resources,upgrade their industries,and obtain excess profits.Many facts show that mergers and acquisitions between enterprises are actually a double-edged sword.If the merger and acquisition is successful,the synergy of mergers and acquisitions can rapidly expand the scale of the enterprise,increase market share,and increase the competitiveness of the enterprise,but if the merger fails,then It will cause losses to both parties of the merger and acquisition,and even drag on the originally well-developed merger and acquisition enterprises.In the capital market,the lessons of success and failure in these two areas are endless.The capital market's doubts about mergers and acquisitions are usually caused by high valuation and unstable performance,which have a significant negative impact on the company's future development.Part of the reason for the lack of performance of the merged party in the gambling of the merger and acquisition is that the performance growth has been heavily injected before the acquisition,and the cost of the default performance compensation commitment agreement is lower.In recent years,as the target companies have more and more cases of gambling failure,the proportion of the target company's performance commitments that fail to meet the standard has also increased year by year,which means that more M&A companies are not optimistic and need to bear more from the failure of gambling.Negative effects.However,in our country,few scholars deliberately study the impact of substandard performance,especially in a specific industry.In order to explore the impact of gambling failure on economic performance,this paper selects Jubilee Technology as a case of merger and acquisition gambling.Based on the existing literature and theoretical research results of merger and acquisition,gambling agreement and performance commitment,the gambling agreement is analyzed in M&A transactions The use of motivation,the risks,impacts and economic consequences,and then put forward corresponding countermeasures.This article explores the various adverse effects of Xingke's unfulfilled performance commitments on M&A's the Guangdong Silver Age Sci&Tech Co.,Ltd.based on various relevant data and data collected,and uses the event research method and financial indicator method to study the M&A The impact of gambling failure on stock prices and financial performance,while also exploring the impact of unsatisfactory performance on the goodwill and reputation of M&A's the Guangdong Silver Age Sci&Tech Co.,Ltd.Through research,it is found that in addition to its solvency,the Guangdong Silver Age Sci&Tech Co.,Ltd.is less negatively affected by M&A on gambling failure,and its profitability,operating ability and growth ability have been weakened to varying degrees,resulting in huge impairment of goodwill At the same time,a series of unfavorable reports frequently damages the reputation of Jubilee Technology and shakes the confidence of small and medium investors.Through the research on the Guangdong Silver Age Sci&Tech Co.,Ltd.M&A and the case of gambling Xingke Electronics,not only can the listed companies view the gambling agreement more rationally,so that the two parties can reach more consensus on the establishment of performance commitments,but also enhance the competitiveness of listed companies and Maintain an effective capital market system.Finally,the author puts forward some suggestions on how to avoid the failure of performance commitments,including the formulation of scientific merger and acquisition strategies,reasonable evaluation of corporate value,improvement of performance commitment agreements,M&A parties signing reverse incentive agreements,freezing of certain assets during the commitment period,and strengthening supervision and prevention of business.Reputation impairment risk.It is hoped that these suggestions can provide some necessary reference value for listed companies planning to conduct mergers and acquisitions.