Research On The Risk Management System Of M&A Gambling Agreement Based On The Whole Process

In recent years,with the steady development of China's economy and the drive of industrial policies,the environment for M&A has become increasingly relaxed,and the M&A market in China has continued to develop.However,due to information asymmetry between the two parties,the risk of M&A also arises.The gambling agreement is also known as the valuation adjustment mechanism.Through the design of the relevant provisions of the gambling agreement,it can effectively restrict the parties and encourage the development of target enterprises.In theory,the use of the gambling agreements in M&A can increase the success rate,promote the development of the companies on both sides,and has positive impacts on the play of synergies after M&A.However,in the actual operation of M&A,because of the ignorance of the risks of the gaming agreement,in particular,the current trend of high valuation of target companies in M&A.With the disclosure of the gambling agreement being gradually expired,when the market carnival bubble gradually dissipated,the true face of the gambling agreement was also revealed,problems such as performance commitments were not met,performance compensation was difficult to get in place,etc.Therefore,how to design a gambling agreement in M&A,and how to make the gambling agreement really play its due role,has become a problem for more and more companies.This paper summarizes the research on gambling agreements at home and abroad,using the risk prevention and control of gambling agreements as the entry point in mergers and acquisitions,and selects the case of company X merging company Y for specific analysis.Firstly,this paper introduces the M&A of the case of company X and Y,the M&A process,the motivations for both parties,and the valuation of company Y;Secondly,this paper identifies the risk points that exist in the process of using the gambling agreement;Thirdly,By summarizing the successful design methods of the gambling agreement in the successful case,and providing targeted solutions to the problems in the risk prevention of the gambling agreement;Finally,in accordance with the general process of using the gambling agreement,put forward the Aspects of improved methods and build a whole process risk management system for M & A agreement on gambling.After analysis,this paper draws a conclusion that is: The gambling agreement is actually a valuation adjustment mechanism.During the acquisition of company X by company X,both parties neglected to prevent the derivative risk of the gambling agreement,and many problems appeared in the design of the gambling agreement,Leading to the failure of gambling,a significant impairment of goodwill,harming the interests of X Company and its shareholders.In view of the shortcomings in the use of gambling agreements,this article puts forward targeted risk management suggestions,and follows the principles of importance,dynamics,comprehensive prevention and control,and synchronous prevention and control.The three stages of the formulation stage and the execution stage are to optimize and perfect the risk management of the gambling agreement,and to build the entire process risk management system of the gambling agreement of the M&A.