Research On The Application Of Performance Commitment Agreement From The Perspective Of The Acquirer

Mergers and acquisitions(M&A)is an effective measure and important way for enterprises to acquire superior resources,realize transformation and upgrading,and enhance market competitiveness.Since 2008,when the performance commitment agreement was first introduced into the practice of M&A in China in the form of regulations,it has gradually become a necessary configuration in the M&A of listed companies.Although many scholars have studied and verified the value of performance commitment agreement in alleviating the information weakness of the acquirer and giving play to the incentive effect,the performance commitment agreement with profit status as the core has also exposed many problems such as management's profit manipulation in the practical application process.Based on the above background,the core research question of this paper is how to set the terms of performance commitment agreement when listed companies conduct M&A.Based on sorting out the relevant laws and regulations of performance commitment agreement and analyzing the current application of performance commitment agreement,this paper takes Spearhead's acquisition of D&S as the research object,a representative case of innovative design of performance commitment agreement.Firstly,this paper analyzes the necessity of performance commitment agreement of listed companies,and then discusses the rationality of performance commitment agreement item by item in combination with industry background,company situation and relevant laws and regulations.Finally,it draws on case experience and other innovative design schemes to put forward suggestions on setting the clauses of performance commitment agreement.The case study found that:(1)in addition to the regulatory requirements,the valuation risk and the principal-agent problem caused by the information asymmetry between the transaction parties and the uncertainty of the future business situation were the main factors for Spearhead to set up the performance commitment agreement;(2)to prevent the risk of the target and to fit the motivation of merger and acquisition is the internal logic of the index design of Spearhead's innovative performance commitment agreement;(3)too short term of performance commitment and improper arrangement of reward consideration are the main defects of the performance commitment agreement of Spearhead.This paper further puts forward suggestions on the setting of performance commitment agreement:(1)make full due diligence and sort out risk factors;(2)optimize the profit index and extend the commitment period;(3)enrich commitment indicators and strengthen merger and acquisition integration;(4)improve the incentive program and strengthen the guarantee mechanism.The significance of this paper lies in that the research perspective is directly on the dimension of agreement setting,and the systematic analysis on how to optimize the terms in the performance commitment agreement has some enlightenment significance for the performance commitment agreement setting of listed companies in the future.