Research On The Economic Consequences Of M&A Under High Performance Commitment

In recent years,the number of M&A in my country’s securities market has increased year by year,and the scale of the amount has continued to expand.The new form of performance commitments has been innovatively introduced into M&A and has been continuously adopted by both parties.In my country,the equity split reform in 2005 was an important sign of performance commitments.In 2008,the China Securities Regulatory Commission adopted laws and regulations to introduce performance commitments into asset mergers and acquisitions.With the gradual increase in performance commitment cases,there are more and more high performance commitments in M&A.M&A of High-performance commitment can bring good incentive effects to enterprises,and encourage the target company’s management to actively carry out business activities,but it also has some negative effects.This series of economic consequences has certain research value.This article is divided into five parts in total.In the first part,the research background and significance are introduced.This part sorts out the research literature related to performance commitments,lists the research content and methods;The second part sorts out the related concepts and theoretical foundations of high performance commitments and mergers and acquisitions.In the third part,the acquisition of Wangxin Precision by Sansheng Education under the high performance promise is the research objective,it introduces the basic situation of both parties to the merger,and analyzes the process and motivations of Sansheng Education’s merger and acquisition,it also organizes the realization of the high performance promise.The fourth part analyzes the economic consequences of mergers and acquisitions under the high performance commitment of Sansheng Education.The analysis framework is as follows:(1)Combining relevant theories to analyze the mechanism of performance commitments affecting the economic consequences of M&A;(2)Use the CAR method to analyze the short-term performance of Sansheng Education M&A under the high performance promise;(3)Use the BHAR method and financial indicator method to analyze the long-term performance of the Sansheng Education M&A under the high performance commitment.The fifth part,based on the case study,this article summarizes the following conclusions:Mergers and acquisitions under high performance commitments can significantly boost the financial performance and market response of the merged company in a short period of time.However,the effect and sustainability of the positive effects of mergers and acquisitions under high performance commitments are poor,and it has brought long-term negative effects to the main merger enterprises and small and medium shareholders.Some of these indicators have already begun to decline during the commitment period.After the end of the performance commitment,the financial performance and market performance of the merger continued to decline.Finally,based on the conclusions obtained in this article,the article puts forward corresponding suggestions on how companies should properly use performance commitments,how independent institutions can play their own management and control roles,and how regulatory authorities can improve performance commitments in mergers and acquisitions.This article enriches case studies of mergers and acquisitions under high performance commitments.It has certain reference value for improving the use of performance commitment mechanism in mergers and acquisitions.