The Influence Of The Valuation Adjustment Mechanism On The Performance Of M&A

With the development of Chinese economy,Chinese M&A and restructuring market is increasingly active under the influence of supply-side reform.In order to prevent the risk of mergers and acquisitions,ease the distortion of transaction pricing,weaken the degree of information asymmetry between the two parties,and safeguard the legitimate rights and interests of minority shareholders,more and more companies have introduced the emerging contract form of performance compensation commitment system in mergers and acquisitions.The performance compensation commitment began in 2008 with the “Regulations on the Management of Major Assets Restructuring of Listed Companies” promulgated by the China Securities Regulatory Commission.It stipulates that listed companies should disclose the profit forecast within three years after the completion of the restructuring in the major asset mergers and acquisitions.If the forecast cannot be achieved,The listed company is compensated by the counterparty.In 2014,the CSRC issued new regulations,which no longer require listed companies to make profit forecast compensation when conducting mergers and acquisitions.The two parties negotiated whether to sign a performance compensation agreement.In this context,the case study object selected in this paper,Alpha Entertainment conducted two mergers and acquisitions before and after the implementation of the new management measures,the macro and industry environment in which the two mergers and acquisitions occurred did not change significantly,whether to accept the performance The compensation commitment mechanism setting is the core difference between the two mergers and acquisitions.Therefore,this paper analyzes the short-term performance of mergers and acquisitions by analyzing the market reaction rate of stock price return and excess cumulative return rate on the acquisition date through the event research method,and analyzes the long-term performance of mergers and acquisitions by analyzing the financial status of the two years before and after the merger.And calculate the economic value added to analyze the changes in the comprehensive performance of its mergers and acquisitions,and further study the impact of performance compensation commitments on mergers and acquisitions.Through in-depth exploration and analysis of the two mergers and acquisitions,the following conclusions are drawn: under various mechanisms of action,performance compensation commitments,whether for long-term or short-term performance of mergers and acquisitions,financial indicators or comprehensive M&A performance,It has a very obvious promotion and incentive effect.In response to this conclusion,companies should not only select high-quality companies for mergers and acquisitions,but also sign a reasonable performance compensation commitment at the time of merger to avoid the risk of high premium.In addition,relevant government departments should improve the construction of relevant systems,and relevant regulatory agencies should strengthen their supervision in the implementation of performance compensation commitments so that they can play a better role.