A Study On The Impact Of Substandard Performance Commitments On Mergers And Acquisitions In Culture And Entertainment Industry

In the past few years,merger and acquisition has become an important means for some listed companies to achieve market value management and profit growth.However,due to its high valuation and unstable performance,merger and acquisition often become the object of market doubt.However,the difficulty in achieving the expected target performance has become an important factor that affects the performance of listed companies.Part of the reason why the performance of Listed Companies in M&A and reorganization fails to meet the target is that a lot of water has been injected before the acquisition,the performance growth is unreal,and the cost of breach of performance commitments is low.In recent years,the performance of listed companies is not optimistic.The rate of underperformance commitment of target companies is increasing year by year,which means that more mergers and acquisitions need to bear the adverse impact of underperformance.However,in our country,few scholars have made special research on the impact of performance commitments that fail to meet the standards,and the related research focusing on an industrial field is rare.In order to study the impact of substandard performance commitments on mergers and acquisitions,the author takes Huayi Brothers case as the carrier to conduct a specific study.In the course of the research,the author collects relevant M&A data and summarizes,classifies,draws and fills them in.Based on the data,through trend analysis and comparative analysis,the author explores various adverse effects of underachieving performance commitments on M&A parties in the entertainment industry from various perspectives.In the course of the research,the author tries to eliminate the influence and interference of other factors on M&A parties,and emphatically analyses the impact of underachieving performance commitments on M&A parties.The impact of underperformance commitment on the profitability,solvency,operating capacity and growth ability of the merger and acquisition party;the impact on the share price of the merger and acquisition party;the impact on the goodwill of the merger and acquisition party;the impact on the reputation of the merger and acquisition party.It is found that the target performance is not up to the standard,which has a great negative impact on Huayi Brothers' profitability,operation ability and growth ability,and has a small impact on Huayi Brothers' solvency.It will cause the fluctuation of the share price of the merger and acquisition party,accumulate a huge risk of impairment for merger and acquisition goodwill,and reduce the reputation of the merger and acquisition party under the influence of the media.By reflecting on the results of Huayi Brothers case study,not only can the merger and acquisition parties treat performance commitments more rationally and agree on performance commitments more suitable for both sides,but also can improve the competitiveness of listed companies and maintain the effective order of the capital market.Finally,the author puts forward some suggestions on how to avoid performance undertaking failing to meet the standards in the entertainment industry,including making reasonable performance undertaking by the target enterprise,making reverse undertaking by the merger and acquisition party,prohibiting star's personal income as the company's total income,attaching a compensation clause with double penalty nature,releasing shareholding after fulfilling performance undertaking and emphasizing imprisonment.Mergers and acquisitions that generate huge goodwill.These suggestions are not only applicable to the entertainment industry,but also have certain reference value for improving a large number of M&A phenomena in which performance commitments are not up to the standard.