Research On The Performance Commitment In The M&A Of Shuanglin Auto Parts Co.

In recent years,more and more M & A transactions use performance commitments to ensure the fairness of the transactions,protect the interests of investors and promote the smooth progress of M & A.However,at present,in the market,there are some problems in the market,such as the increase in performance non-compliance,the change of performance after accurate compliance,and no guarantee of performance compensation.On the contrary,the use of performance commitments has had an adverse impact.Behind these problems,there are still deficiencies in the design and management of performance commitment.If we can put forward improvement suggestions on performance commitment,it will be conducive to the better use of performance commitment in subsequent M & A,give play to the synergy of M & A,achieve higher development,and promote the healthy development of China’s capital market.This paper selects the acquisition of Shuanglin investment Co.by Shuanglin Auto Parts Co.as a case,studies the performance commitment agreement and practice,discusses the problems existing in the design and practice of performance commitment and performance compensation,and tries to provide relevant reference for the application of performance commitment.Firstly,the paper combs the relevant literature of performance commitment,including the signing motivation,influencing factors,implementation effect and related M & A of performance commitment.Secondly,it expounds the relevant theories.The signing of performance commitment can reduce the information asymmetry of M & A to a certain extent.However,because performance commitment can send a positive signal to the market,it may become a tool for some people to transfer interests.By improving the specific design of performance commitment,it can reduce the principal-agent cost and better realize the effect of M &A.Thirdly,this paper studies the performance commitment signed by Shuanglin Auto Parts Co.when it acquired Shuanglin investment Co.,analyzes the setting of performance commitment terms,finds that there are problems in which the valuation deviates from the actual value,the commitment goal is too high and difficult to achieve,the single performance evaluation index and the disputes caused by compensation terms,and deeply analyzes the reasons behind it.It is found that the design of terms is lack of flexibility,the management of performance compensation is not in place,and the market supervision and accountability are not in place.Finally,combined with the analysis of this case,we get the relevant enlightenment when using performance commitment:firstly,the listed company should improve the implementation details.First,we should make the performance commitment play its role.The M & A parties should correctly treat the performance commitment,reasonably evaluate the value and operating ability of the subject matter,and implement risk assessment before M & A.reverse commitment can be used to standardize performance commitment in related M & A.second,we can design more flexible performance commitment terms,establish and improve the performance evaluation index system and improve the way of consideration payment.Third,improve the management terms of performance compensation,set performance compensation deferred performance terms,and ensure that the commitment party has the ability to perform the contract;Secondly,the regulatory authorities should play a supervisory role,pay equal attention to process supervision and result supervision,strengthen the information disclosure management of performance commitments,strengthen the responsibilities and obligations of all parties in M & A,and improve supervision.Through these analysis and research,we try to provide enlightenment and help for the practice of performance commitment in China’s M & a market and promote the high-quality development of capital market.