A Case Study Of Merger And Acquisition Premium And Performance

With the rapid development of China's economy,cultural industry has gradually become a new engine of China's economic development with the support and promotion of the state.In the coexistence of opportunities and challenges,there has been a upsurge of mergers and acquisitions in the cultural industry,which has resulted in the obvious overvaluation and high premium.Based on the current situation of mergers and acquisitions in cultural industry,this paper takes company A merging company B as an example,through case analysis method,analyses the causes of high premium in mergers and acquisitions of cultural enterprises from four perspectives: characteristics of cultural industry,pre-merger performance of target enterprises,synergistic effect of mergers and acquisitions,competitive game and so on.Then,through market performance and financial situation,it analyses the causes of high premium in mergers and acquisitions of Descriptive analysis of performance.The analysis shows that although company A has paid a high premium for the acquisition of company B,the performance after acquisition is in line with the original expectations of company A.It can be concluded that although the cultural industry will produce high premium phenomenon due to the particularity of its industry,the phenomenon of high premium does not necessarily mean that it will have a negative effect on the performance of mergers and acquisitions.The successful M&A of Company A and Company B does not mean that the high cost of the enterprise can bring high returns.On the contrary,the high premium paid by the main merger enterprise will bring huge risks to the future operation of the enterprise.In view of the above risks,this paper puts forward suggestions from the following three aspects: improving the pricing methods of underlying assets;? attaching importance to the process of determining the price of M&A?strengthening the prevention of premium risk.Through the above three suggestions,I hope to provide some reference for future mergers and acquisitions in the cultural industry.