Analysis Of The Performance Commitment And Profit Transfer Of Merged Companies

Merge and Acquisition(M&A)has been on hot focus these years,and M&A is to realize rapid capital expansion and enhance operational efficiency via resources integration to give full play to cooperativity.To microcosmic aspect,M&A is a multi-win economic activity for merging companies,merged companies and investors;to macroscopic aspect,it is a very efficient way for optimizing resources integration.However,because of the existence of information asymmetry between merging companies and merged companies and clients and agents,moral hazard becomes an outstanding issue in the M&A,and therefore performance commiltment is an effective way to overcome moral hazard under the information-asymmertry condition in theory.But with the reality that modern enterprise system and stock market don't take a long history of operating,several issues come into being including enclosing money motivation of listed companies,low quality of listed companies,fake information around the market and information disclosure not in time and speculation atmosphere.These issues make it a question whether performance commitment can be a practical means to overcome information asymmetry.Besides,at the M&A activities,whether the fixed barriers of technology and means for the value estimation of merged companies' capital will be the scientism-ish profit seeking means.And rationally analyzing the current situation,we have to consider the reality of high transfer premium which may bring problems and uncertainty.So in this thesis we studied merged companies who didn't realize their promise to find if there existed transfer of benefits and try to combine the M&A data from the listed companies and use empirical approaches to give an answer to these problems.On the base of sorting the relevant literatures and documents systematically,in this theses we analyze the moral hazard in the M&A activities and according to the barriers of the technology discount free cash flow model,we demonstrate the probable existence of profit transfer.All these work combines the current man-made economic profit incentives among listed companies governing and the theory of information asymmetry.We set listed companies which made the performance commitment at the M&A activities from 2010 to 2015 as the objects of study.From these M&A events we gather the corresponding data which shows the completion status of performance commitments and make them as samples.The we use empirical approaches to verify the possible profit transfer and the empirical analysis show the results:1.Under companies who don't realize their promise,the more the compensation merged company should pay to the listed company is,the more the assessment income will be.2.Under companies who don't realize their promise,the income is generally larger than the compensation.3.Listed companies in our country prefer to undertake M&A activities just for the mania of M&A and there exists profit transfer obviously.4.At the M&A activities of the listed companies in our country,performance commitment fails to prevent the moral hazard effectively,and on the contrary,it turns out to be the tool to finish profit transfer via over-high value estimation by the stakeholders.So we get the comprehensive results and give several corresponding advice.