Analysis Of The Motivation And Function Of The Bilateral Gambling Agreement In Enterprise Mergers And Acquisitions

As an investment tool introduced from developed countries,the gambling agreement can protect the rights and interests of investors on the one hand,and effectively encourage the management of the company on the other hand,and plays a very good role in financing the enterprises.With the continuous improvement and development of the Chinese M&A market,more and more enterprises are increasingly using the tool of gambling agreement in their M&A activities.In the process of merger and acquisition,the gambling agreement is an agreement between the acquirer and the transferor on the future uncertainty when the merger agreement is reached.If the agreed conditions appear,the transferor can exercise a right;if the agreed terms do not appear,the acquirer exercises a right.From the perspective of the contract,the gambling agreement plays a key role in the merger and acquisition of enterprises.It is an agreement between the investor and the financing party on the uncertainty of the future when the investment and financing agreement is reached,that is,the two sides ensure their respective A series of financial terms listed in the interest.If the agreed conditions arise,the investor can exercise a right;if the agreed terms do not appear,the financier exercises a right.The advantage of signing the gambling agreement is to reduce the degree of information asymmetry between the two parties,to encourage and constrain the management of the acquired party,and to play a certain role in safeguarding the rights and interests of the investors.Therefore,the gambling agreement is gradually favored by the capital market.However,according to the current M&A market in China,the performance of the M&A party's performance is not up to standard,the arbitrarily change compensation plan,and the refusal to perform performance commitments have increased dramatically.These chaos not only caused huge losses to the mergers and acquisitions,but also adversely affected the healthy development of China's capital market.The various types of interests in the process of mergers and acquisitions seriously damaged the vital interests of the small and medium shareholders of listed companies.Since there are many capital operation methods that can damage both parties in the actual operation process,the application of the gambling agreement in enterprise mergers and acquisitions is worth studying.Based on the existing theory of mergers and acquisitions and gambling,this paper selects the case of Shellett's Optoelectronics' acquisition of Fushun Optoelectronics as the research object,and analyzes the application and influence of the gambling agreement in enterprise mergers and acquisitions.In the process of merger and acquisition,some reference opinions are provided for the signing of the gambling agreement.This paper is divided into five parts.Firstly,it introduces the research background and significance of this paper.It summarizes the research results of mergers and acquisitions and gambling agreements at home and abroad.On this basis,the research ideas,methods and structural framework of this paper are carried out.Introduced.The second part is a theoretical overview,introduces the concept,type and main elements of the gambling agreement,and expounds the motives for signing the gambling agreement in the enterprise merger and the theoretical basis for the company to sign the gambling agreement.The third part analyzes the case of Shellett's Optoelectronics' acquisition of Fushun Optoelectronics,and introduces the situation of M&A entities,the purpose of M&A and the characteristics of M&A.The fourth part mainly analyzes the role of the gambling agreement in mergers and acquisitions from the perspective of the content of the gambling agreement,the motivation of the two parties to sign the gambling agreement and the final result of the gambling.The fifth part is the conclusion and enlightenment of the case study.Through the analysis of the case of Shellett's acquisition of Fushun Optoelectronics,it is found that the use of the gambling agreement promotes a win-win situation for both parties.In the process of corporate mergers and acquisitions,the listed company should set appropriate The performance target is to formulate a scientific and reasonable gambling clause to fully play the role of the gambling agreement and reduce the risk of mergers and acquisitions.The main contributions of this paper are as follows:(1)In the past,the research on the gambling agreement of listed companies mainly focused on private equity financing,but lacked attention to the gambling in the process of mergers and acquisitions.The signing and its role in research have enriched the research literature on the gambling agreement.(2)In the past,the research on the gambling agreement in enterprise mergers and acquisitions mostly focused on the unilateral role of the gambling agreement on the purchaser.This article elaborates from the perspective of both the acquirer and the acquired party.The role of the gambling agreement on the merger party also analyzes the significance of the gambling agreement for the acquired party,and can provide experience for the signing of the gambling agreement in the future mergers and acquisitions of listed companies.