| The addition of performance commitment clauses in mergers has become a common choice for many domestic M&A since 2008.For a period of time after that,a large number of high-goodwill and high-performance commitment mergers and acquisitions have exerted a conducive impact on promoting the market performance of the acquirers.However,after the abnormal volatility of the A-share market in 2015,the financial market has begun to return to rationality.Not only many mergers and acquisitions with high goodwill and high-performance commitment clauses cannot significantly improve market performance in a shortterm,but also the negative phenomenon of high-premium mergers and acquisitions with performance commitment clauses have been common.Among the mergers with performance commitment clauses implemented in China stock market in the past seven years,the proportion of unaccomplished performance commitment has been at a high level.Failure to meet performance commitments not only directly reduces corporate performance and damages the interests of investors,but also could seriously affect the normal and orderly operation of the capital market.Both the participants of merger and acquisition and the regulators attach utmost importance to the risks associated with the performance commitments.How to set performance commitment compensation mechanism better in business combination? How can the acquirer manage and control risks while ensuring returns? These issues need to be addressed urgently.Utilizing the case of Xinli Finance’s merger and acquisition of Chinasoftbank as an example,this thesis modifies the performance commitment risk analysis framework based on previous researches of scholars,analyzing the performance commitment-related risks and incentives of them from three levels: risk core layer,risk performance layer and risk inducement layer.Then propose several control measures of specific risks.It is hoped that this thesis could help Xinli Finance to identity and resolve related risks,provide a reference for investors to invest rationally and mergers of other companies with similar conditions,and improve the performance commitment risk analysis framework. |
