Research On The Influence Of Performance Commitment On The Performance Of M&A

With the development of China's economy,China's company has got a rapid growth in the aspect of scale and benefit.However,in recent years,our capital market experienced a decline in endogenous growth.Therefore,our economy has to undergo the transformation.At the same time,lots of companies began to find a new way to expand their company,such as massive deal of mergers and acquisitions.What is noticeable is that more and more companies signed a performance commitment agreement.In 2008,the SFC wrote the performance commitment agreement into the policy regulations officially.As soon as this innovative system appeared,it was favored by many enterprises.In the merger and acquisition transactions,because of the existence of information asymmetry and the different profit subjects,there are risks and problems in the merger and acquisition.The performance commitment agreement was created to prevent risks,and many enterprises also successfully use the agreement to protect the interests of their shareholders.However,in recent years,more and more failed cases have caused attention of many scholars.A great deal of enterprises have not achieved the standard of performance,what's more,the corresponding compensation mechanism has not played a useful role.The agreement has increased the failure of mergers and acquisitions.Some enterprises even chose to solve the problem through the legal channels.Starting from the study of the economic and social background,the first chapter reviews the relevant literature of performance commitment and M&A performance at home and abroad,and illustrates the contribution and shortage of this paper.The second chapter expounds the concepts of performance commitment and acquisition performance and theoretical basis for the emergence of performance commitment.The third chapter is an explanation and analysis of how performance commitment affects M&A performance.Through analyzing the high premium,high or low performance objectives,different methods of performance compensation and lagging enterprise integration,the paper will illustrate the mechanism.The forth chapter is a case description,including the cooperation agreement and the implementation of the agreement.In the fifth chapter,the author uses the means of case analysis.Through the analysis of a M&A case of Aisidi,combined with the basis of the theory analysis,the author will expound how the performance commitment effects the acquisition performance.The last chapter is about the conclusion and suggestions.The author hopes this paper could provide references and suggestions for future mergers and acquisitions which want to avoid risks by signing performance commitments agreement.