Research On The Influence Of Performance On Gambling And Performance In The Merger And Acquisition Of Baihua Village

The early application of gambling agreements was used in western private equity financing.With the rise of domestic mergers and acquisitions wave,gambling agreements were widely used in domestic corporate M & A activities.However,the signal effect on the gambling agreement leads many listed companies to use the high performance commitment of the gambling agreement to make high premium purchases,artificially pushing up the stock price.The realistic result is that with the expiration of the gambling period,failure to meet the standards has erupted one after another.This phenomenon not only causes losses to the acquirer and small and medium investors,but also causes a bad impact on the healthy development of our capital market.In January 2016,Baihuacun and Warwick Pharmaceuticals started a merger and acquisition transaction.Due to the relatively high appreciation rate of Warwick's net asset assessment,Baihuacun and Warwick Pharmaceuticals signed a three-year net profit gambling agreement to protect their own rights.However,Baihuacun has not completed its gambling target performance for three consecutive years.This article takes this case as the research object,and adopts financial index analysis method,EVA analysis method and event research method to study the market performance and financial performance of Baihuacun M & A.This article first explains the concepts of M & A and gambling,and sorts out the relevant theories of the impact of M & A on gambling.After that,it briefly introduces the general situation of Baihuacun and the target Fanghuawei Pharmaceutical Company.Gambling process and the implementation of post-gambling performance commitments are sorted out and analyzed;next,financial indicators analysis,EVA analysis,and event research are used to study the financial performance of Baihua Village after the merger and gambling transaction.The study finds that Baihua Village had difficulty operating in the traditional industry and it was difficult to break through the saturation of the industry.Therefore,it chose to restructure and acquire Warwick Pharmaceuticals in order to improve its operating performance and remove the hat of ST.However,in terms of operating performance after the merger,the acquisition of Warwick Pharmaceuticals by Baihuacun only brought short-term improvement effects.This improvement is not sustainable.Warwick Pharmaceuticals has not fulfilled its performance commitments for three consecutive years.Baihuacun accrues after high premium mergers and acquisitions.As a result of the impairment of a large amount of goodwill,the company subsequently caused huge losses.According to the analysis of the author,in the analysisof the case of Baihuacun M & A vs.Warwick Pharmaceuticals,it was found that there was greater uncertainty in the performance of the M & A target in the process of mergers and acquisitions.The performance commitment is too high,only focusing on short-term performance growth,and the post-merger synergy effect is not well exerted.Finally,in response to the above problems,it is proposed to carefully select the target of the merger,strengthen the management of the merger premium,sign reasonable performance commitment terms,and value long-term performance Suggestions on goals,etc.