Research On The Application And Effect In Conglomerate M&A

With the situation of market economy at home and abroad becoming more challenging,more and more enterprises choose merger and acquisition to expand their scale,develop advantages from external strategy,increase the corporate competitiveness and enhance its profitability in order to seek better survival and development path.As relevant departments of the national government take more robust actions in the investment and supervision,enterprises have an optimal merger and acquisition situation,the industrial structure has acquired better adjustments,the assets are distributed in a more reasonable way,and the transformation and upgrading have been realized.However,due to the high risk and asymmetric information,many enterprises introduce gambling agreement in the merger and acquisition to cut down the risk in recent years.Compared with more developed capital markets in foreign countries,the history of gambling agreements started in a relatively slow pace.Since the rise in China in 2013,some enterprises are likely to sign the unreasonable gambling terms in the application of the agreement due to ill-conceived relevant laws and regulations as well as the scarcity of effective summary for experience from practice.For example,they make a high estimate for those enterprises in merger and acquisition and set some unrealistic performance goals.Therefore,it is necessary for enterprises to understand the inner risks in the agreement and try to avoid them under the background of an increasing use demands for it,thus gaining a better mastery of the internal mechanism of gambling agreement,optimizing its application effect and rendering it to exert a great function to biggest degree so as to help the merger and acquisition between the two parties,maximize the interests of both sides endowingChinese enterprises with a better development,and improve the capital market in our country,which is the purpose and significance of this paper.In this paper,it takes Lianjian Optoelectronic as the case enterprise,which has adopted the literature research and case study to perform researches in the mechanism design of gambling agreement and the effect in practice.First of all,it combs the literature of the gambling agreement at home and abroad in various aspects including notion and character of gambling agreement,risk prevention,application effect,legitimacy and accounting handling research,and expounds the current situation and risks in the gambling agreement in the merger and acquisition from perspectives of the principal-agent theory,option theory,incentive theory,information asymmetry theory and incomplete contract theory.Secondly,it introduces case analysis,which expounds the background,and the motivation to sign the agreement on gambling of the case enterprise Lianjian Optoelectronic.Thirdly,it lists the specific terms of the gambling agreement signed by the three merged enterprises,such as UTOP Public Relations,Esdlumen and Litang Marketing.It also explores the reasons for the differences in the performance of the merged parties in the gambling agreement from three perspectives of the differences in the valuation of the merger,the differences in the design of the performance commitment terms,and the differences in the compensation scheme,so as to dig out the underlying reasons behind the performance difference in the gambling agreement of the three enterprises.Finally,the paper finds out the unreasonable specific terms and problems in the gambling agreement in addition to the summary of traits in the gambling agreement of Lianjian Optoelectronics mainly from the perspectives of the rationalization of performance commitment and compensation terms,risk prevention in the process of the signing,the diversity of gambling indicator,the behavior restriction of management level,the contingency mechanism of design in the gambling agreement and the reformulation of the gambling agreement so as to design a more reasonable term mechanism of the gambling agreement,optimize the application effect,greatly help to merge and acquire for the win-win,provide the effective reference in thedesign of the gambling agreement for other enterprises and enrich the current fruit in this matter.