A Case Study Of Using VAM In The Merge And Acquisition Of Zhejiang Huafei Electronic Substrate Co.,Ltd. By Jiangsu Yake Technology Co.,Ltd.

With the rapid development of China's economy,and the pursuit of rapid development by many enterprises.companies will hope to expand the size of the enterprise with less capital and rationalize the capital portfolio through M&A and reorganization,so as to help enterprises improve their economic efficiency.However,for the investors,it is impossible to obtain the complete management information of the target company,so it is also impossible to acquire the target company at the fairest market price.At the same time,for the financing side,the company's market prospects are also inestimable.Therefore,in order to solve the inevitable information asymmetry in the M&A market and the difference in the valuation of the target company,the enterprise also chooses to sign a VAM as a supplement when carrying out the M&A activities.In fact,the signing of VAM in M&A activities can improve the level of asset security of the investor company and protect the investment income;On the other hand,the financing company can define a quantitative business goal to ensure that there are incentives and constraints within the enterprise after the merger.As a result,the VAM is now being paid attention to and adopted in the domestic M&A market.This article is an analysis of a merger and acquisition case that signed a VAM at the time of the M&A.Taking the case of Jiangsu Yake Technology Co.,Ltd.,which acquired Zhejiang Huafei Electronic Substrate Co.,Ltd.and signed the VAM as the entry point,and using the case study method to evaluate the motives of implementing the VAM,and this paper expounds the process of using VAM in the M&A and the contents of the VAM,and analyzes the influence of using VAM in the M&A on Yake Technology,and then draws the enlightenment of using VAM in the M&A.On the whole,this case is a successful transaction.Huafei Electronics makes use of Yake Technology's extensive customer resources and sales channels through the use of the VAM in the M&A,and at the same time makes use of the advantages of the capital platform of listed companies,competitive technology is rapidly industrialized and scaled;By using VAM in the M&A,Yake Technology shares the customer group and marketing network of each other,and makes full use of the synergy brought by M&A to realize the industrial extension and structural upgrading.Through the research on the M&A process of Yake Technology and Huafei Electronic,this paper summarizes the VAM as an auxiliary way for Chinese enterprises to complete M&A,if the VAM can be applied reasonably,the enterprise can complete the merger and reorganization activities more successfully.In the process of merger and reorganization,investors often demand that the performance of target enterprises after M&A can grow rapidly,so many target companies usually focus on immediate returns in order to achieve the high-speed growth of financial performance.However,the signing of the VAM can reduce the uncertainty of investment and promote management to achieve long-term performance goals.On the whole,signing a VAM in M&A can also protect the interests of both sides of investment and financing,so it is advocated that the investor company should comprehensively consider the actual situation of the enterprise to set performance targets when formulating the VAM.In order to achieve the goal of better sustainable development after merger and acquisition.