| In recent years,many companies have entered into performance commitment agreements through M&A transactions to seize more market share in order to seek development,and to reduce the negative impact of information asymmetry.However,in the process of signing,it is easy for the acquirer to ignore the drawbacks brought by the performance commitment,such as high goodwill impairment and loss of actual control,which will lead to conflicts between the mergers and acquisitions,and even the occurrence of loss of control of the subsidiary.Therefore,this paper takes the performance commitment defect as a starting point to analyze the causes and consequences of the loss of control of subsidiaries.Based on the theory of information asymmetry,principal-agent theory and incomplete contract,this thesis studies the out-of-control event of subsidiaries from the perspective of performance commitment.Firstly,from the perspective of the market,the relationship between performance commitment and the loss of control of subsidiaries is constructed,and the reasons for the loss of control of subsidiaries caused by performance commitment defects are analyzed.Secondly,this thesis selects the case of Zhongjia Bochuang,analyzes the operation mechanism of the subsidiary out of control from the above perspective,and explores the negative impact of the loss of control of the subsidiary on both the acquirer and the acquirer from different aspects.Finally,for the pre-mid-ending and post-M&A,corresponding suggestions are put forward to make up for the performance commitment gap as much as possible.This thesis finds that: first,there are two main reasons for the loss of control of subsidiaries caused by performance commitment: on the one hand,internal defects,performance commitment will induce the acquired party’s earnings management,increase the risk of high goodwill impairment of the acquirer,and make the acquirer unable to obtain actual control in time;On the other hand,there are external deficiencies,the lack of strong supervision and serious penalties for performance commitments,resulting in subsidiaries actively choosing to lose control.Second,a loss of control of a subsidiary can have a negative impact on both acquirers and acquisitions.For the parent company,it will affect its stock price and financial position,and even face delisting risks and legal liabilities;For subsidiaries,not only will they be compensated for performance commitments,but their credit risk will increase and their market position will decline.Third,enterprises can reduce M&A risks by conducting full research before M&A,reasonably setting performance commitments during M&A,and strengthening the supervision of subsidiaries after M&A.In summary,this thesis explores the role of performance commitment in the event of a subsidiary out of control,makes up for the shortcomings of existing research,and gives some inspiration to other enterprises,so as to better protect the rights and interests of the acquirer. |
