Research On The Influence Of Performance Commitment In Mergers And Acquisitions Of Pharmaceutical Enterprises

The wave of enterprise mergers and acquisitions has started since 2013.The support of national policies and merger and reorganization can indeed bring new development vitality to enterprises and achieve mutual benefit and win-win situation.So are on the path of the merger and reorganization of listed companies,performance promise as a kind of valuation adjustment agreement,can reduce the risk to a certain extent,but there are blinded by the huge profits of the enterprise was,sign the performance commitment only in order to quickly get big deal in the short term,which caused many performance promises fail,mergers and acquisitions both sides between the tragic ending,mergers and acquisitions activity in how to use performance commitment can achieve better results,performance pledge agreement for the effect of mergers and acquisitions activity mainly in what aspects and so on all need to analysis and research,Therefore,the analysis of the impact of performance commitment on m & a activities is a worthy research direction.The author adopts two research methods of literature analysis and case analysis.Firstly,the author makes a simple review of the recent development of corporate reorganization and merger and acquisition in the medical field involved in this paper as well as the influence brought by performance commitment.Secondly,it narrates and summarizes the theories related to m&a,enterprise valuation and performance commitment,and briefly expounds the relevant institutional background of the application of performance commitment in m&a.Then started case analysis,this paper introduces chengdu xinhua medical m&a process of Germany and operating performance after m&a,key performance commitment form and performance commitments to perform analysis on the influence factors of mergers and acquisitions,mainly from the enterprise valuation,the profit forecast and subsequent management accountability and m&a goodwill,financial indicators and stock price is studied.Then,based on the completion of the performance commitment,this paper analyzes the deficiencies of the performance commitment agreement in this case,and finally puts forward Suggestions on how to set the performance commitment in a more reasonable way.Through the above research and analysis,this paper research at three conclusions:first,determine the performance commitment in the form of mergers and acquisitions will produce various influence,mainly to the enterprise value assessment,target of enterprise's profit forecast and entrusted with the responsibility of corporate management three aspects,as long as reasonable use will play its positive role;Secondly,clear performance commitment will also affect enterprise merger and acquisition when it is implemented,mainly from three aspects of the impairment of business reputation of the enterprise,the subsequent operation of the enterprise and the change of the enterprise's stock price.Businesses need to be careful.Finally,the performance commitment with stop-loss mechanism will reduce the risk of merger and acquisition to some extent.The failure of performance commitment is usually due to the excessive compensation amount of performance commitment,and the failure of the promising party to pay simply.The performance commitment with stop loss clause can effectively avoid such phenomenon.