The Research Of Acquisitions Valuation Risk And Strategy Under The Enterprise Mergers With Performance Compensation Commitment

In recent years,along with the coming of the golden age of M & A market in China,the expansion of new industries and the transformation of traditional industries are in full swing.The M & A activities of Chinese enterprises are also flourishing.The valuation of enterprises has always been the eternal hot issues in the activities of merger and acquisition and reorganization of enterprises.In order to achieve fair and reasonable investment transactions,encourage the performance level of the financiers,and protect the investors' practical interests,performance compensation commitment emerges as the times require.However,with more than a half M & A activities started using performance compensation commitments,it becomes a double-edged sword in M& A activities.Due to various reasons,the sequelae of performance compensation have been showing up in the near future.All kinds of economic disputes and judicial proceedings concerning mergers and acquisitions under performance compensation commitments have been exposed.The most critical reason is valuation risk,and it has become very important to prevent and control the risk.Through theoretical research and the case analysis,this paper first collate the existing research results on valuation theory and valuation risk at home and abroad,and then find the research status about this article.Secondly,expounds the connotation and theoretical basis of enterprise valuation,it is clear that the key role of enterprise valuation in M & A,because of the information asymmetry and incomplete contract theory,valuation risk problem also exists objectively in three sessions about valuation.Subsequently,using the ShanDong Geo-Mineral Co.,Ltd as an example to analyzes the valuation risk in the company.Finally,based on the advanced views in the field of valuation at home and abroad and the actual situation of M & A in Chinese market,three ways of strategies are put forward to deal with risks.In the early stage of valuation,we can implement risk early warning mechanism on the basis of ex ante due diligence,identify potential enterprises with high valuation risk,and take precautionary measures to prevent possible adverse consequences.At the same time,it is necessary to make the overall target of the market clear and analyze the development of the industry.In the application of valuation methods,we should correctly face the drawbacks of future earnings related to the valuation methods,rationally predict future earnings andchoose the correct valuation discount rate.The third part is for the valuation of the results through the strategy,strengthen accountability,government departments and the judiciary to further accelerate the improvement of relevant laws and regulations,improve the efficiency of law enforcement,criminal responsibility on the part of serious behavior,to increase the enterprise or individual default cost.At the same time,it is suggested that the results of the valuation of M & A should be checked in order to control the situation of the enterprise in the M & a valuation.On the other hand,this paper calls on enterprises to attach importance to the influence of corporate reputation.Based on the combination of theory and case,this paper puts forward some suggestions to deal with the problem of valuation risk,so as to provide help for the orderly operation of M&A valuation,to protect the both sides of interests and to develop the capital market more healthier.