Research On High-Premium Mergers And Acquisitions And The Encroachment Of Major Shareholders’ Interests

Mergers and acquisitions,as the majority of choices for companies to expand their business scale,achieve diversified development,and improve market competitiveness,will have an important impact on business performance and sustainable development.In recent years,as my country’s capital market has become more prosperous,mergers and acquisitions between enterprises have become more frequent.In order to catch the "mergers and acquisitions" of the express train,many companies even ignore the quality of the target assets and blindly carry out highpremium mergers and acquisitions.In this process,the major shareholders of some listed companies even used high-premium mergers and acquisitions to seek personal gains,which seriously harmed the interests of small and medium shareholders and listed companies.How to implement mergers and acquisitions in a standardized manner and prevent the possible encroachment of the interests of large shareholders is of great significance for protecting the interests of small and medium shareholders and improving corporate governance.At present,most scholars at home and abroad focus solely on high-premium mergers and acquisitions or the encroachment of the interests of major shareholders,however,combining the two,starting from highpremium mergers and acquisitions,there are few studies on the major shareholders’ interest encroachment during the mergers and acquisitions of listed companies and their causes.In view of this,this article uses the case analysis method to study the encroachment of the interests of major shareholders in high-premium mergers and acquisitions and its consequences and causes.This article first sorted out the literature and theories related to premium mergers and acquisitions and the encroachment of major shareholders’ interests,and established the theoretical framework.Secondly,selected A-share listed company Lianchuang shares as a case,sorted out its 4 high-premium mergers and acquisitions activities from 2015 to 2018,and analyzed its post-merger market performance and financial performance.On this basis,research and analysis of major shareholders’ equity pledges,share reductions and related transactions during successive highpremium mergers and acquisitions and their consequences for interest embezzlement.Then,this article analyzes the causes of the encroachment of the interests of major shareholders from both internal and external aspects.Finally,draw research conclusions and put forward relevant countermeasures and suggestions.Through research and analysis,the following conclusions can be drawn:(1)High-premium mergers and acquisitions do not necessarily mean that companies purchase good assets,but may also be a means for major shareholders to embezzle their interests.(2)The specific interest encroachment path of major shareholders is:in mergers and acquisitions,high-premium mergers and acquisitions send positive signals to the outside world,stimulating the stock price to rise.Major shareholders took the opportunity to reduce stock holdings and frequently and high-proportion equity pledges to obtain liquidation funds.After the merger,the quality of the underlying assets gradually emerged.Prior to the substantial provision of goodwill impairment by listed companies,major shareholders with information advantages have realized capital flight through means such as reduction of holdings.In addition,the case company sold important profitable assets to related parties at a low price at the beginning of the merger,and sold previously purchased assets to related parties at a very low price after the merger,that is,using related transactions to achieve benefits through buying high and selling low Encroach.(3)The encroachment of the interests of major shareholders has internal and external causes.Stock price changes,frequent and high proportion of equity pledges exacerbate the separation of the two rights,high performance commitments,goodwill impairment risks,and imperfect internal governance are internal factors that induce major shareholders to embezzle their interests.The incomplete information disclosure system,the flexibility of the current follow-up measurement standards for goodwill,and the inadequate penalties of laws and regulations have provided opportunities for major shareholders to embezzle their interests.The research conclusions and suggestions of this article can provide some help for listed companies,investors and market regulators to a certain extent.