Research On The Risk Of Premium Merger And Acquisition In Media Industry From The Perspective Of Performance Commitment

The academic world has never stopped talking about Mergers and Reorganizations,but the most talked-about year for Mergers and Acquisitions probably began in 2013.In 2013,the central committee of the communist party of China explicitly introduced A policy to encourage listed companies to carry out merger,reorganization and integration.And then on,wave after wave of mergers and acquisitions were launched on the A stock market.Subsequently,the scale of goodwill is also in unprecedented expansion.Such inflated goodwill actually buried a lot of bombs,which were detonated together with the performance commitment near the end of the period.Thus,in 2018,A number of companies with good performance in the A stock market witnessed the phenomenon of goodwill explosion.Among these industries,the cultural media industry seems to be the worst.In order to demonstrate that the performance promise will magnify the risk of premium M&A and increase the likelihood of exploding goodwill,this paper adopts literature analysis method to explain the theories and concepts involved in this paper,and will also be cited as evidence when proving the viewpoints of this paper.Comparative analysis method will also be used to compare the targeted company,Tian Shen Entertainment and the overall situation of the industry.In addition,this paper will also use the case analysis method,which is also the core method used in this paper,to conduct an in-depth analysis of the Tian Shen Entertainment's acquisitions,and draw the conclusion that performance commitment will push up the premium of the merger,increase the goodwill impairment and a series of subsequent risks.The academic world has never stopped talking about Mergers and Reorganizations,but the most talked-about year for Mergers and Acquisitions probably began in 2013.In 2013,the central committee of the communist party of China explicitly introduced A policy to encourage listed companies to carry out merger,reorganization and integration.And then on,wave after wave of mergers and acquisitions were launched on the A stock market.Subsequently,the scale of goodwill is also in unprecedented expansion.Such inflated goodwill actually buried a lot of bombs,which were detonated together with the performance commitment near the end of the period.Thus,in 2018,A number of companies with good performance in the A stock market witnessed the phenomenon of goodwill explosion.Among these industries,the cultural media industry seems to be the worst.In order to demonstrate that the performance promise will magnify the risk of premium M&A and increase the likelihood of exploding goodwill,this paper adopts literature analysis method to explain the theories and concepts involved in this paper,and will also be cited as evidence when proving the viewpoints of this paper.Comparative analysis method will also be used to compare the targeted company,Tian Shen Entertainment and the overall situation of the industry.In addition,this paper will also use the case analysis method,which is also the core method used in this paper,to conduct an in-depth analysis of the Tian Shen Entertainment's acquisitions,and draw the conclusion that performance commitment will push up the premium of the merger,increase the goodwill impairment and a series of subsequent risks.The media industry,culture,perhaps including other investors,operators of the industry,are in such a barrier,calling for more strict policies,rules,specifications for specific item of the m&a deals,calling for acquisitions of listed companies to adopt a more rigorous fair way to evaluate,treat goodwill can be more careful.Of course,it is not enough to rely on subjective wishes alone.The author believes that after the "bath" of goodwill in 2018,both market regulators,operators and investors will be more cautious about this issue.From the perspective of the cultural media industry,this paper focuses on the topic of premium merger and acquisition,and analyzes the performance commitment as a means of paying consideration,which is related to the overvaluation of the target enterprise and the explosion of goodwill,and gives some suggestions.From the perspective of the cultural media industry,this paper focuses on the topic of premium merger and acquisition,and analyzes the performance commitment as a means of paying consideration,which is related to the overvaluation of the target enterprise and the explosion of goodwill,and gives some suggestions.