Study On Goodwill Impairment Risk And Prevention Of Shandong Mining Machinery’s High Premium Acquisition Of Linyou Interactive

From the feedback of the overall domestic and international economic development situation in recent years,enterprises try to seek scale expansion or profitability through merger and reorganization.This behavior has been A wave in China’s A-share market since2010,and mergers and acquisitions among enterprises are in a rapid trend.Many enterprises want to continue operation or transform and upgrade,so merger and acquisition is the most effective way.Combined with the support and guidance of national policies in some fields,M&A has become an effective way for enterprises to optimize the allocation of resources and improve their own strength.However,in the M&A process,there may be a high premium M&A.Enterprises should follow the market rules in the M&A process,and should not damage and affect the rights and interests of the majority of investors due to their own efforts.Besides,whether the M&A party can integrate the resources well after the M&A and do a good job in risk coping mechanism,the M&A party unilaterally shows the good profitability to the M&A party in order to realize its own interests.And then sign unrealistic performance commitment agreements with the merger and acquisition party.Whether the development ability of many target enterprises can be maintained or even improved after the expiration of the commitment is worth discussing.This paper takes Shandong Mining Machinery’s acquisition of Linyou Interactive as the case study object,hoping that the analysis of this case can provide useful experience for traditional enterprises’ acquisition of asset-light enterprises.This paper adopts the literature research method and the case study method.Firstly,it summarizes the research status of domestic and foreign experts and scholars in the aspects of M&A,M&A performance,goodwill,goodwill impairment risk,etc.,and summarizes the classical theories,mainly from the perspective of high-premium M&A,goodwill formed by M&A and goodwill impairment risk.By case study,this paper selects the case of Shandong Mining Machinery’s merger and acquisition of Beijing Linyou Interactive,sorts out the motivation and process of merger and acquisition,confirms goodwill and goodwill impairment,analyzes the causes and risks of goodwill impairment,and draws the conclusion that there may be financial risks,operational risks and market risks of goodwill impairment,and then puts forward preventive suggestions from the perspective of the enterprise itself according to the impact of risks.At the same time,we also hope that the enterprises in the industry and the economic market can develop healthily and orderly.