An Empirical Study On The Impact Of Performance Commitment On The M&A Performance Of Listed Companies

China's M & A market has developed rapidly in the past few years.Valuation adjustment mechanism(VAM)have been widely used in M & A cases,and private equity institutions have also actively participated in them.However,with the increasing number of "three high" mergers and acquisitions with "high premium,high commitment,and high goodwill",frequent "jump-ticket" incidents of difficult performance goals appear frequently,and the disadvantages of valuation adjustment mechanism have become increasingly prominent.The media industry has always been the hardest hit area for the "three highs" mergers and acquisitions.With the CSRC reaffirming several times to curb the "three highs" mergers and acquisitions and continually promulgating relevant valuation adjustment mechanism,the media industry's "three highs" mergers and acquisitions are still common.In this context,whether the valuation adjustment mechanism can have a positive impact on the acquirer's investigation needs to be re-examined.This article selects 654 M & A cases in the A-share media industry from 2014 to 2019 as a research sample,and uses the event research method to study and analyze whether the performance commitment agreement,compensation method,and performance commitment level are signed in the M & A transaction.Impact of performance.Because private equity investment institutions also have the motivation to use performance commitment agreements to seek high considerations and high exit returns,this article next explores the role of the private equity investment background of the target party in the performance commitment agreement setting,and finally further studies the private equity background of the target party.Whether it has impacted the performance of listed companies' mergers and acquisitions.In terms of data selection,this paper uses Wind database,Tianyancha and other websites to download and manually select relevant sample data.Based on this,after performing descriptive statistical analysis and correlation analysis,a regression model is established to check whether the performance is signed in the entire sample.Commitment agreement,whether the target party has a private equity investment background.The two factors affect the acquirer's short-term M & A performance.The regression model is used to analyze the performance commitment compensation method and performance commitment level on the acquirer's short-term M & A performance.influences.In order to explore the possible mechanism of the effect of private equity investment background on the setting of performance commitment agreement,this paper establishes a logit model to study the impact of the private equity investment background of the target company on the signing of performance commitment agreement and the level of performance commitment.The research results show that:(1)Signing a performance commitment agreement has a significant positive impact on the acquirer 's short-term M & A performance.At the same time,the regression results in the sub-sample show that,compared with M & A transactions with compensation methods of “cash compensation”,share compensation is used.The acquirer's short-term performance is better,and the higher the level of performance commitment,the worse the acquirer's M & A performance.(2)The background of the target's private equity investment has affected the setting of the performance commitment agreement.When the target has a private equity background,both parties to the merger and acquisition are more willing to sign a performance commitment agreement,and the agreed level of performance commitment is lower.(3)When the target party has a private equity investment background,the acquirer's M & A performance is better,and the private equity background strengthens the positive impact of the performance commitment agreement on the acquirer's M & A performance.According to the conclusions of the study,this article first makes recommendations to the target and acquirer of a merger and acquisition transaction,and encourages both parties to sign a performance commitment agreement to the extent permitted by their capabilities to avoid promising high performance targets.At the same time,market regulators are called on the one hand to speed up the implementation of relevant policies and strengthen supervision to ensure that performance commitments are reasonable,compensation is fully fulfilled,and the "three highs" M & A is curbed from the perspective of performance commitment agreements.On the other hand,referring to the earn-out(contingent consideration)model commonly used in foreign mergers and acquisitions,the "one hammer deal" is changed to a "fixed + floating" method.Part of the consideration is paid first,and the remainder is paid after the target party completes the performance target.Consideration.Finally,it is suggested that investors can use the performance commitment content and the equity background of the target party in the merger and acquisition case as a reference for selecting the investment target and investment strategy.The innovation of this article is mainly to use empirical methods to study the sample of mergers and acquisitions of listed companies in the media industry,to avoid the contingency of the results that may have occurred in the previous research.Another innovation is the in-depth study of the impact of the private equity investment background of the target company on the signing of the performance commitment agreement and the level of performance commitment,enriching the research on the factors affecting the performance of mergers and acquisitions and private equity investment.