Research On Performance Commitment And Protection Of Minor Shareholders’ Interests In Merger And Acquisition

In order to solve the problem of differences in the circulation system of tradable shares and non-tradable shares in the capital market and balance the interests of relevant shareholders,in 2005,the State Council began the work of the share-trading reform of listed companies.With the release of a series of guidance and management methods,the performance commitment was born.The performance commitment is mainly applied to M&A transactions,which is to prevent excessive risk of the high valuation of injecting assets.In 2008,with the performance commitment officially appeared in the "Management Measures for Major Assets Restructuring of Listed Companies",and the active period of mergers and acquisitions in China’s capital market,the application of performance commitments became more frequent,and the "sequel" became increasingly prominent.In recent years,the problem of “high valuation and high premium” in the capital market’s mergers and acquisitions has been very serious.Through in-depth research,it is found that behind the “high valuation,high premium”,both parties to the transaction often signed a performance commitment agreement.In addition,the large loss of the underlying assets during the commitment period and the use of various means by the promiser to evade the compensation obligation are common which seriously infringe the interests of the minority shareholders.Therefore,this article takes AURORA as an example.First of all,this paper sorts out the related literature about the performance commitment and the minority shareholders’ interest,and summarizes the relevant theories.At the same time,the relevant concepts are clarified and the overall status of performance commitments is described.Next,enter the case section.The background introduction part of the case introduces the basic situation of the two parties before the merger,the merger plan,the change of the shareholding structure before and after the merger of AURORA and the main content of the performance commitment agreement.The core part is the case study.To explore the impact of performance commitment on the interests of minority shareholders,this part uses case analysis and event research methods to study the motivation of performance commitment,the damage of minority shareholders’ interests and the reasons for their damage.Through analysis,this paper draws several conclusions.First of all,the performance commitment has not become a "tool" to prevent the high valuation of the target company.Second,the promised party may act to infringe the interests of the minority shareholders.Finally,the relevant laws and regulations on performance commitments still need to be improved.In addition,the paper proposes corresponding recommendations based on internal corporate governance,external supervision,and minority shareholders themselves.This paper enriches the research literature on performance commitments.At the same time,taking the typical case as the research object also makes the research of this paper have certain practical significance.However,since this article is only a single case study and the company information that can be referenced is second-hand,which leads to certain limitations in the research,and the research conclusions need further testing.