Research On The Design Of Valuation Adjustment Mechanism In Mergers And Acquisitions

In recent years,China's macro-economic growth rate slowed down,the endogenous growth power of enterprises is insufficient.Therefore,Mergers and acquisitions(M & A)has become the favored means for many enterprises to expand their market share and increase their competitiveness.Compared with the way that enterprises enter the market by investment and self-construction,the cost of M & A is lower and the obstacles are smaller,which makes the existing M & A market very active.However,with the more frequent use of M & A,its disadvantages are gradually emerging.Because of the high valuation of Information Asymmetry,and the high premium of M & A transactions,the risk of M & A is increasing.As a new tool to guard against the risk of M & A,Valuation Adjustment Mechanism(VAM)has come into being.VAM been widely used since it was introduced into Chinese market.At present,there are many enterprises using VAM in our country,but in the final result of VAM,there are successful ones,but most of them end in failure.Those successful enterprises are on the road of rapid development.For those enterprises that fail in gambling,the management often faces the risk of losing high compensation,getting into the predicament of stock right dispute and even lawsuit.The conclusion of the bet agreement will undoubtedly have a far-reaching impact on the interests of both sides.Therefore,in-depth analysis of the whole process of VAM potential problems,in view of the problems put forward a comprehensive design proposal is conducive to the merger and acquisition of both sides in the signing of VAM rational use of VAM,and ultimately achieve a win-win situation for both sides.This paper takes the bet agreement with the Blue Focus as a case study,combining the relevant theories at home and abroad and the current situation of the bet agreement,through case study method and Comparative Analysis Method,the author analyzes the design of VAM before,during the design of VAM and during the performance of VAM in time order,it is concluded that the advantages of the blue cursor bet agreement are:reasonable bet performance,a variety of compensation programs,involving a reasonable incentive program.The existing problems include insufficient due diligence before the design of VAM and the inconsistency of management strategy between thetwo parties when the VAM is implemented.And in view of the carding conclusion main point,puts forward the suggestion pertinently.With a view to M & A activities for listed companies to sign a betting agreement to provide experience for reference.