Research On The Motivation And Consequence Of High Performance Commitment In Corporate Merger And Acquisition

With the continuous development of China’s economy and the gradual improvement of the capital market,many enterprises in China continue to improve their management ability and expand their market by means of mergers and acquisitions.In the process of merger and acquisition,in order to facilitate the smooth process of merger and acquisition,some enterprises will choose to make performance commitment to help enterprise valuation and maximize profits.In a fundamental sense,the formulation of performance commitment is actually a choice for the uncertainty of the future development of enterprises.Many enterprises formulate high performance commitment to stimulate their own continuous development and ensure the smooth fulfillment of the performance commitment on the one hand,and to ensure the success of mergers and acquisitions on the other hand.However,since the use of performance commitment,more and more enterprises only take performance commitment as a means of merger and acquisition,and fail to recognize the essence of performance commitment.Then,after the occurrence of merger and acquisition,the subsequent development of enterprises is not satisfactory,and eventually lead to the failure of performance commitment,which also greatly affects the enterprises themselves.A high performance commitment can indeed make an enterprise attractive to the majority of investors.However,if it cannot better measure its own value strength and future prospects,then a high performance commitment will eventually become a landmine after enterprise merger and acquisition.High performance represents high returns,but also represents high risk,and the probability of fulfilling high performance promises is also reduced.Therefore,if an enterprise fails to fulfill its performance commitment,it will not only face high compensation for its performance commitment,but also face damage to its reputation,which will affect its future operation.In the long run,this will lead to a vicious circle,which is not conducive to the development of the enterprise.Based on the above background,this article selects the golden horse co m&a zhongtai car this case,by using literature research,case analysis,financial index method,comparative analysis and event study deeply analyze golden horse equity mergers and acquisitions in the auto commitment to high performance motivation,high performance commitments existing problems and their consequences of.First of all,the golden horse co m&a zhongtai car set high performance commitment is the main reason for mergers and acquisitions party,new energy automotive industry has a relatively broad prospects,but because the valuation method is biased towards the outlook for the future,lead to mergers and acquisitions valuation is too high,has a high premium,the m&a party perspective,zhongtai auto need greater financial support to expand the market,To promote the development of their own new energy vehicles,so to promote the smooth progress of mergers and acquisitions.Secondly,this paper also deeply studied the problems in the establishment of high performance commitment in the case of merger and acquisition and the consequences caused by failure.The problems in the process of the establishment of performance commitment is also one of the reasons for the failure of the enterprise to complete the business commitment.In general,it is found in this case study that,on the one hand,the failure of performance promises will cause the enterprise to bear huge compensation;on the other hand,the failure to meet the scheduled performance promises will also cause a large negative impact on the reputation of the company,weakening the investment enthusiasm of the majority of investors and not conducive to the long-term development of the company.Finally,through the case of Jinma Group’s acquisition of Zotye Automobile,which made excessive performance commitment and led to the failure,this paper warns the major enterprises not to make high performance commitment blindly,and summarizes the failure reasons,experience and lessons,so as to provide relevant reference for other enterprises making performance commitment.