The Motivation And Risk Analysis Of Huayi Brothers' High Premium M&A

With the development of economy and society,and the improvement of people's living standards,the demand for high-quality cultural products is also increasing.In order to promote the development of cultural industry,the country has introduced a series of policy documents to support listed cultural media companies to implement mergers and acquisitions using the capital market.The increase of public demand,the intensification of industry competition and the joint effect of national industrial policy make the high premium mergers and acquisitions events of cultural media industry occur frequently,and it has caused widespread concern and discussions in society.Whether the high premium level is reasonable,whether the high performance commitment has played its due role,whether the high premium in mergers and acquisitions an objective reflection of the value of the target company or a reservoir of future risks...These issues are worth discussing.This paper takes Huayi Brothers as example and analyzes a series of high premium M&A events,enriching the case study of high premium M&A.This paper mainly analyzes the high premium M&A event from the perspective of motivation and risk.In the aspect of motivation,taking the motivation theory and the theory of information asymmetry as basics,this paper analyzes the motivation from the perspective of talent reserve,the acquisition of synergy effect and the self-interest behavior of managers.In the aspect of risk,combining financial indicators and non-financial information,the paper analyzes the risks of high premium payment,the performance of the target company,the accounting treatment of high premium M&A and the environment of industry policy.Through the analysis,this paper holds that it is reasonable for Huayi Brothers to bind star resources and strengthen core business through high premium M&A.However,due to the benefit transfer,pressure of payment and insufficient integration of resources after high premium M&A,the company faces financial risks,and its performance does not meet expectations.High premium M&A has proved to be unreasonable.In view of the problems during high premium M&A,this paper attempts to propose countermeasures.We hope it can provide some suggestions for listed companies to implement high premium M&A and prevent risks.