Analysis Of High Premium On The Acquisition Of The Cultural Enterprise

Since the transformation and upgrading of industrial structure,making the cultural industry the pillar industry of the national economy has become an important direction in the development of our country.Merger as one of the important means of resource allocation has become the key path to cultural enterprises' denotative development.Many listed companies made themselves bigger and stronger by means of mergers and acquisitions in the niche market.Mergers and acquisitions in cultural industry often show "high value" and "high premium" characteristics.So,what's the cause of the high premium in China's culture industry mergers? How these elements influence the premium rate? Is the existence of this phenomenon reasonable?In this paper,we choose Great Wall International ACG Company as a case study object.We will analyze the cause of high premium from the aspects of the whole cultural industry,the target enterprise and the merger event itself.And we found out three main reasons: cultural industry's policy and supporting,the high value-added features and the high performance commitment.By comparing the performance after merger and the performance expected before the merger event,we found that the bubble performance commitments and taking an over optimistic view of the core creative teams make the merger price not reasonable.And through further analysis,we found that the unreasonable acquisition premium will bring potential risk of goodwill impairment.Therefore,in order to avoid the risk of unreasonable premium,the reasonable merger premium needs the support of cultural industry policy,the high quality of the core creative team,and an achievable performance commitment.Finally,we put forward some suggestions for the reasonable pricing of cultural enterprises mergers and for the effectively integrations after the merger.