Research On The Application And Impact Of Performance Commitment In Listed Company Mergers And Acquisitions

Nowadays,the M&A activities of listed companies are becoming more frequent.Mergers and acquisitions not only enable companies to reduce costs and improve efficiency through resource reorganization and industrial integration,but also enable companies to quickly move from one field to another,or to quickly move out of one field expansion.However,M&A is also a risky behavior with extremely high uncertainty.In order to reduce the risk of M&A,most companies often sign a performance commitment system with the target company because it has the advantage of protecting the interests of investors and reducing the premium of M&A.However,in the later period when M&A activities and performance promises were both sought after,the performance of many companies’ performance promises was far from the original promises.There were frequent performance breaches by listed companies,and the performance was not optimistic.This not only brought a lot of problems to both companies.Many negative effects have also made investors bear painful losses.Therefore,this article takes the application of the performance commitment system in the mergers and acquisitions of listed companies and its impact on enterprises as the research direction to carry out related research.This paper selects Fulum Precision’s acquisition of Shenghua Technology as a specific case.It mainly conducts research from two aspects.On the one hand,it analyzes the design plan,application motivation and implementation of the performance commitment system;on the other hand,it studies the application of performance commitments to business Discuss the influence of reputation,company stock price and operating performance.Finally,on this basis,we found out the problems in the performance commitment of Fulin Precision M&A.The study found that the fulfillment of the performance promise in this case was not satisfactory,and the effect of implementation was far from the expected goal.The performance promise pushed up the valuation of Shenghua Technology,leading to the impairment of Fulin Precision’s goodwill during the promise period.In the short term,although the performance promise will increase the stock price,it has limited protection for small and medium investors.In the long run,it is difficult to improve the company’s performance,and it has also dragged down the performance of Fulin Precision.Investigating the reasons,this article believes that the performance commitment in Fulin Precision’s merger and acquisition of Shenghua Technology has the following problems: the selection of indicators by the valuation agency is unreasonable,and the transaction consideration is overvalued;the focus on short-term performance has weakened the integration effect;the protection of small and medium shareholders is limited;The supervision mechanism is not perfect.Therefore,the following suggestions are made: First,fully research and carefully select valuation indicators before valuation;second,companies should strengthen post-merger integration and establish long-term development strategies;third,investors should maintain a rational attitude and treat the company in a reasonable manner Performance goals;fourth,the regulatory authorities should improve specific regulatory measures and strengthen daily supervision.