Research On Preventing The Risk Of Goodwill Devaluation By Gambling Agreement Under Premium Merger And Acquisition

In recent years,with the continuous adjustment of industrial structure and the further promotion of supply side reform,many traditional industry enterprises encounter development bottlenecks,so it is necessary to adjust enterprise strategy and business model as soon as possible to cope with the changes of external environment.Therefore,many traditional enterprises choose cross-border M&A to enter industries with strong technical advantages or key support of national policies,so as to disperse business risks and realize strategic transformation.However,due to the existence of information asymmetry and other problems in the process of M&A,some listed companies' m&a premium is extremely high,and they have accumulated a huge amount of goodwill.In recent two years,China's economic growth has been declining,and the credit environment has been tightened.Many of the enterprises being merged face severe business risks.If they fail to meet the performance commitment,they will face the risk of goodwill impairment in M&A,which will affect the listed companies Performance,damage the interests of small and medium-sized shareholders.In this paper,one of the successful and successful cases of M&A on gambling is selected as the research object,which is the event of cross-border M&A of Weichuang company,Hongying education and golden cradle.It analyzes and studies how to set up the relevant terms of the agreement on gambling to prevent the risk of goodwill impairment and protect its own interests under the condition of huge goodwill formed by premium M&A,and then obtains whether the agreement on gambling is feasible under the condition of premium M&A In order to effectively prevent the risk of goodwill impairment.Firstly,this paper analyzes the causes and preventive measures of goodwill impairment risk under premium M&A,as well as the mechanism of preventing goodwill impairment risk by gambling agreement,and then through the specific analysis of the M&A case of Weichuang,finally draws conclusions and enlightenment.After theoretical analysis and case study,this paper concludes that a reasonable and effective counter gambling agreement can effectively prevent the goodwill impairment risk of the acquirer under the condition that the acquirer generates a large amount of goodwill at a premium.Specifically,the agreement on gambling can reduce the valuation risk caused by the high premium rate of the underlying assets before the acquisition,and prevent the operational risk of the acquiree during the commitment period of the acquisition and the possible goodwill impairment risk of the acquiree after the acquisition.Based on the results of the case study,this paper puts forward some suggestions.Before the signing of the gambling agreement,the acquirer should rationally choose the target of the merger and take the payment plan based on share based payment.During the signing,it should design reasonable performance,gambling indicators and diversified exercise standards.After the signing,it should strengthen the supervision of the acquiree,and design incentive terms to the target enterprise management to better achieve the goal The effect of preventing the risk of goodwill impairment.