Research On Performance Commitment Risk Management In China Literature Group’s Merger And Reorganization

With the rapid development of our country’s economy,the market competition is more and more fierce,M&A has become the main way to expand the competitiveness of enterprises.Therefore,in the M&A transactions of listed companies in China,performance commitment is widely used to reduce the risk of M&A.Performance commitment,as a valuation adjustment scheme,can effectively motivate the acquired party to fulfill its performance and reduce the risk caused by its uncertainty in the future.However,with the increasing popularity of performance commitment in China’s M&A market in recent years,the failure of performance commitment in the implementation process is gradually exposed.Many enterprises suffer great losses due to the failure of performance commitment,which has greatly affected the confidence of investors,and their risk management can not be ignored.In this paper,Reading Group M&A Sino-Media as the research object,combined with real options theory,information asymmetry theory,risk management theory and principal-agent theory.First of all,the Reading Group M&A Sino-Media were introduced,and from different perspectives in-depth analysis of the performance of both parties to the M&A commitment.On this basis,the risks of mergers and acquisitions are identified from the three stages before and after the signing of performance commitment,and then evaluated by AHP.It is found that in this M&A transaction,Reading Group has the largest proportion of investigation risk and valuation risk prior to the signing of performance commitment,and has the largest risk of choosing payment method during the implementation of performance commitment.When the performance commitment fails to meet the requirements,the biggest risk faced by the enterprise is goodwill impairment risk.Finally,in view of the above problems,the countermeasures for risk prevention and control of performance commitment in the merger,acquisition and reorganization of Reading Group are as follows: reasonably evaluating the base of performance commitment,reasonably introducing the performance incentive plan,enriching the performance commitment assessment indicators,specifying the operation right during the performance commitment period,strengthening the information disclosure of performance commitment,improving the post-merger integration and endogenous growth capacity,strengthening asset inspection and value assessment,optimizing the follow-up compensation method for performance commitment,and strengthening the internal audit and collaborative management of the merged enterprise.