Risk Control Analysis Of Y Media's Merger And Acquisition Of Champs-Ely Media Under Performance Commitment

In recent years,with the country 's adjustment of the socio-economic development direction,traditional industries are facing upward pressure,and capital urgently needs to transition to new fields.Investment and financing in the media field has entered an explosive growth period,and mergers and acquisitions and reorganizations have shown a high growth trend Various high-premise acquisition cases frequently occur,and the industry generally has risks.Behind every merger and acquisition,there is a shocking gamble.In order to control the risks of mergers and acquisitions and ensure the stable growth of performance,the acquirer usually sets certain performance targets for the target company.Once the target company fails to achieve the promised performance,it must give the acquirer certain compensation in the form of cash and shares.The risks are taken and there is a danger that the goodwill may be impaired.It can be seen that how high a media company can stand,how heavy a performance commitment it must withstand.Under normal circumstances,the performance commitment period is a threeyear cycle,and 2017-2018 has become a concentrated manifestation period of performance commitment results.This article mainly takes Guangdong Media's merger and acquisition of Champs Media as a case,and uses the approaches such as case study,literature research and data analysis to unveil the process of risk control during the four phases of strategic decisionmaking,value evaluation,performance goal setting,and financial integration.It revealed the problems in the risk control of Guangdong Media's merger and acquisition of Champs Media under performance commitment: the value evaluation stage severely overestimated the profitability of the target company and insufficiently responded to the risk of high premium acquisitions;excessively high performance targets caused financial fraud;In the financial integration stage,effective measures have not been taken to ensure the stability of the target enterprise,and a complete vertical management system has not been formed;the strategic decision has been made without the actual situation of the company's own development,and the awareness of M & A risks is weak.It also finds out the reasons to respective issues and solutions to tackle them.It has a comprehensive survey of the target companies by Guangdong Media and scientific evaluation with the help of intermediaries;it improves the performance target setting by setting multiple performance standards instead of single target values and repeated games.Reasonableness;establish a unified and standardized financial management system and strict capital budget management system to strengthen the supervision of the acquiree: strengthen the risk awareness of merger and acquisition decisions as well as other recommendations.This paper shall propose specific methodologies to tackle with M & A risks under performance commitments.On the one hand,this will help to enhance the ability of Guangdong Media to deal with the risks of mergers and acquisitions,thereby improving the level of corporate mergers and acquisitions.The level of corporate M & A risk response under performance commitments offers effective innovative ideations and brand new approaches for domestic companies in terms of controlling or even avoiding those M & A risks.