The Research On M&A Risks And Preventions Under Performance Commitment

In recent years,the trend of merger and acquisition prevails.Although M&A can bring many benefits,many hidden risks lead to the unsatisfactory effect or even failure of M&A.Comprehensive identification and active prevention of risks has become an important part of M&A activities.Among the many risks in China's M&A market,China securities regulatory commission(CSRC)strongly advocates the application of performance commitment in M&A in order to reduce the valuation bubble caused by income law and protect the rights and interests of minority shareholders.In theory,performance commitment can,to some extent,curb malicious manipulation of valuation pricing,safeguard fair transactions,protect the rights and interests of small and medium-sized investors,and make M&A transactions more fair.Especially in the case of information asymmetry between the two sides of merger and acquisition,the signing of performance compensation commitment agreement can to some extent avoid the risk of inflated investment by the merger and acquisition party and reduce the possibility of merger and acquisition failure.However,due to the nature of performance commitment and the defects in the content of performance compensation agreement,more risks are derived from performance commitment in the application of M&A transactions in China.The identification and prevention of these risks have an important impact on the positive role of performance commitment in M&A.Based on this,this paper focuses on the research of M&A risk under performance commitment.Firstly,this paper sorted out and summarized relevant research literature at home and abroad.It was found that there were few literatures on comprehensively summarizing and preventing M&A risks under performance commitment by Chinese scholars.This paper aims to supplement this aspect.Secondly,based on the principle of performance commitment,this paper divided the whole process from signing to completion of performance commitment into four stages,namely,the signing of performance commitment,the completion of performance commitment,the performance of performance commitment and the completion of performance commitment.Theoretically,it analyzed the risk of enterprise merger and acquisition in each stage and its generation mechanism.Again,according to the statistical analysis of thought,from our country enterprise mergers and acquisitions market status and risk characteristics,commitment to the development course in our country enterprise merger and acquisition performance,performance under the promise of my enterprise M&A risk analysis,performance commitment in the application present situation of our country enterprise mergers and acquisitions four aspects analyzes the performance pledge the application condition of M&A in our country.Then,this article takes the typical case of Xinhua Medical's acquisition of Yingde Bio as an example,and thoroughly analyzes the merger and acquisition process,the content of the performance compensation agreement,and the performance of the performance commitment,and analyzes the performance commitment of Xinhua Medical M&A.The nature and mechanism of the risk of Yingde biological derivatives.Finally,the risks in the three processes before the performance commitment,the performance commitment period,and the performance commitment period are targeted to propose high-merger mergers and acquisitions through due diligence and reasonable valuation,considering sequential mergers and acquisitions,enriching the performance commitments,and reasonable.Preventive measures such as designing compensation payment methods,strengthening control over the acquired party,and increasing attention to the financial status of the performance commitment party.