Study On The Motivation And Risk Of Implementing VAM In M & A

In recent years,the VAM has gradually become a distinctive feature of the marketization of M&A of listed companies in China.As a safeguard contract in M&A,the root of designing and implementing VAM in M&A of listed companies is to prevent the target enterprise’s uncertainty of the future profitability,and the purpose is to realize the rationality and fairness of M&A transactions and lock in risks as much as possible.It is not only the umbrella of the interests of the acquirer,but also plays a certain incentive role for the target enterprise.However,in the process of "voluntary" use of the innovative tool of VAM,it often happens that the target company makes high performance promises,inflates the high valuation bubble,causes the impairment of goodwill,and encourages the concerted actors to steal profits.In the background of the increasingly widespread application of VAM in M&A market,it is of great significance to study the motivation and risk of implementing VAM.This thesis selects the case of Shanghai Mj acquired by Huanghe Whirlwind,and makes an in-depth study on the motivation and risk of the implementation of the VAM,which has a certain practical guiding significance to improve the M&A tool innovation of listed companies in China.This thesis adopts literature research,case analysis.On the basis of searching and summarizing the relevant literature at home and abroad,this thesis describes the current situation of the implementation of VAM in M&A of listed companies in China,and deeply discusses the motivation and existing risks of the implementation of VAM.Then,taking the case of Shanghai Mj acquired by Huanghe Whirlwind as the object of study,the thesis analyzes the motivation and risk of the VAM in M&A,and further put forward suggestions and countermeasures,so as to summarize the experience for the M&A implementation of VAM in the future.Through the study of the case of Huanghe whirlwind designing and implementing the VAM to acquire Shanghai Mj,this thesis draws the following conclusions: The main motivation of design and implementation of VAM is to quickly promote the high premium M&A plan,create market opportunities for the rise of share price,and bind the interests of management and the company;The risks of implementing VAM in M&A include: pricing risk hidden by high performance matching,earnings manipulation risk by management,stock price collapse risk caused by performance failure,huge goodwill impairment risk after the matching period,performance compensation risk induced by share pledge;The Huanghe Whirlwind relied too much on the VAM and ignored the risk prevention before and after the betting period,which ultimately resulted in serious damage to the interests of listed companies and investors.Finally,this thesis puts forward relevant countermeasures and suggestions for the reference of listed companies and regulators.