Research On The Impact Of The Profitability Payment Plan In Cross-border Mergers And Acquisitions On The Synergy Of Mergers And Acquisitions

In China's M & A market,In order to reduce the information asymmetry between the two sides and avoid high premium risk,so as to protect the interests of small and medium-sized investors,signing performance commitments or gambling agreements between the two parties has become a more common phenomenon.Both parties hope to help the M & A pricing be more reasonable by signing an agreement.However,with the continuous development of M & A and reorganization activities,the performance commitment agreement has become more and more deviated from its original intention.Even when the performance commitment period is reached,the acquired company fails to meet the performance commitment target,and the acquired company randomly changes the performance commitment or refuses to pay.Compensation happens from time to time,leading people to wonder whether performance commitments can play their role in the country.The profitability payment plan(also known as contingent deferred payment)is widely used in M & A transactions of listed companies.It is an instalment M & A payment method.When the target company 's performance reaches the profit forecast,the M & A party will pay the balance of the M & A The company being acquired.This article uses the Metano M & A BBHI cross-border M & A event for case analysis,and conducts research from three perspectives of the effectiveness of the profitability capacity plan: incentive effect theory,signal theory,and capital cost,combined with profitability payment in actual cases Analyze the setting of the plan and study its impact on the synergy effect after the merger.After going through the above research,it is concluded that the profitability payment plan can enhance the synergy of M & A in the M & A transaction and reduce the risk of integration after M & A.Therefore,the profitability payment plan is worth promoting this kind of M & A payment method in China,but in the process of implementation,we must pay attention to details and control,and combine with the domestic market for localization improvement,so as to maximize its role and promote the healthy development of China's M &A market.