Research On Financial Conflicts In Parent-subsidiary Companies Based On The Perspective Of Valuation Adjustment Mechanism

Enterprise merger,acquisition and reorganization can production benefit in a short period of time,and help to realize scale effect,rapidly expanding market share,but because of the asymmetry of information,easily lead to overestimate the value of the M&A party,so M&A in order to maintain their own interests,the two sides would bet on agreement,once be acquirers can finish performance,you need to compensate according to the compensation terms and conditions of the agreement.However,the gambling agreement cannot completely solve the problem of “high valuation and high premium”.Even when the performance of the acquired party fails to meet the target,there will be high impairment of goodwill,resulting in heavy losses of the acquiring party.In fact,the impairment of high goodwill is caused by high-price mergers and acquisitions,and the high-price mergers and acquisitions are caused by high performance commitments.It can be seen that the wager agreement has not played its due role of protection,but has become a "thunder" for future operations,with hidden risks.This paper takes Oriental seiko and pride as case companies for analysis.Orient seiko acquired 100% of Beijing pride new energy battery technology co.,ltd.in 2016,and the two sides also signed a bet agreement.But in April 2019,the two sides disagreed over whether pride would make a net profit in 2018.This paper analysis the financial conflicts between the stepmother subsidiary bet against failure,find out the cause of the conflict,from the results promised utility ability,operation effect and economic consequences,arbitrage sifang face bet mechanism has carried on the corresponding analysis and evaluation,and based on the perspective of performance on the reviewing of the parent-subsidiary financial conflicts,and finally gives the corresponding solutions.Innovation points and the significance of this article is:(1)the performance are studied in combination with financial conflicts,based on the perspective of performance pledge of parent-subsidiary financial conflicts,find out the causal relationship between them,further enrich the study of the theory of the parent-subsidiary financial conflict,(2)in this paper,the mechanism of bet raised questions about the security function of further doubt whether it is reduced to arbitrage mechanism,and based on the analysis confirmed the results did not play a role to ensure bet mechanism,harm the interests of minority shareholders,and become one of the factors of parent-subsidiary financial strife.This paper analyzes the financial conflict between Oriental seiko and pride under performance counterbet,draws the corresponding conclusion,and gives the corresponding strategy,which is helpful to reduce the financial conflict and potential problems caused by the unreasonable counterbet agreement,and emphasizes the rationality of the counterbet agreement.Enterprise performance pledge agreement in the merger,acquisition and reorganization,the eyes can not short,not limited to shortterm interests,based on the enterprise long-term development strategy,to the benign relations between development of m&a stepmother subsidiary lay a solid foundation,this article also advice to regulators must,strengthen the supervisory ability of the third party,and constantly improve the capital market in China.