Red Sun Acquisition Chongqing Zhongbang Research On Motivation And Risk Of High Performance Commitment

Performance commitment was once A share as a distinctive institutional arrangement,by the merger and acquisition market hot.After years of practice,some cases of "performance commitment" have become indescribable "scars" in some cases of merger and reorganization,which not only hinder the normal integration of listed companies and subsidiaries,but also directly lead to high-priced mergers and acquisitions and huge goodwill risks.In recent years,under the severe crackdown of the regulatory level,the M&A market has gradually returned to rationality,and the phenomena such as "explosion of restructuring" and huge goodwill impairment have decreased significantly compared with previous years,but the controversy about "performance commitment" has not subsided.Therefore,it is of certain research value and practical significance to study the motivation and risk of high performance commitment in the process of M&A.This paper firstly expounds the research background and significance of high performance commitment in M&A,and summarizes the literature research status at home and abroad on the motivation of high performance commitment in M&A and the risk management of high performance commitment.Secondly,the high performance commitment of Red Sun’s acquisition of Chongqing Zhongbang is analyzed,and then the whole process of the acquisition is sorted out from the target value of high performance commitment,payment method and compensation method.Then from the strategic planning of Red Sun,Chongqing Zhongbang’s own advantages combined with relevant theories to analyze the motivation of high performance commitment in detail.Then,from the perspective of risk management,the analysis framework of performance commitment risk is constructed.Starting with the three stages of risk before,during and after the period of high performance commitment,it is revealed that the risk of high performance commitment failure in the case lies in overvaluation of enterprises,unreasonable setting of performance commitment target value,earnings management risk caused by performance pressure and other factors.Finally,through the study of the high performance commitment case,the final conclusion is drawn: set the target value of performance commitment prudently,evaluate the enterprise value and payment method reasonably,and set the performance compensation related to goodwill impairment.On the basis of the conclusion,this paper combined with the actual situation of enterprises,from the careful due diligence,the selection of reasonable payment method,attention to the integration of resources after the merger and acquisition of relevant enlightenment and suggestions,hoping to provide certain reference value for the future merger and acquisition behavior of Chinese basic chemical,chemical pesticide and other enterprises.