Research On Performance Changes And Economic Consequences After Performance Commitment Period

With the increase in the number of mergers and acquisitions,the performance of the target company has changed after the commitment period,resulting in a cliff-like decline in the performance of the acquirer,and the interests of the acquirer and medium and small investors have been seriously infringed.In addition,the number of mergers and acquisitions in the new energy industry has shown an increasing trend in recent years,but the mergers and acquisitions of some new energy companies have not achieved the expected performance,but have put the acquirer at greater risk.In view of this phenomenon,this paper explores the main reasons for the performance change of the target enterprise after the commitment period,and compares the market reaction and enterprise performance before and after the performance change,so as to present the economic consequences of the performance change to the acquirer and investors.This paper uses the literature research method,case study method,event study method and financial index method to analyze the causes and economic consequences of the performance change of Jiulong Automobile after the commitment period.Firstly,sorting out the M & A process,the motivation for signing performance commitments,and the completion of performance commitments.Secondly,analysing the performance change from the aspects of M & A plan,industry environment and enterprise behavior.Thirdly,from the perspective of market reaction and financial performance,this paper analyzes the economic consequences of Jiulong Automobile ’s performance change to Jiangte Motor.Finally,combined with the above analysis,summarize the relevant enlightenment,and provide some references for mergers and acquisitions,small and medium investors and regulators.Through the analysis of the merger and acquisition case of Jiangte Motor,this paper draws the following conclusions: Firstly,the unreasonable setting of the merger and acquisition plan,the poor industry environment and the earnings management behavior of the management are the main reasons for the performance change of Jiulong Automobile after the commitment period.Secondly,the performance change of Jiulong Automobile prompted Jiangte Motor to accrue huge goodwill impairment provisions.In that year,the net profit was lost,the financial situation declined,the business operation was hit hard,and the market value was also hammered,seriously damaging the interests of small and medium investors.However,after Jiangte Motor gradually found the foothold and growth point by selling Jiulong Automobile,the financial status and market value of Jiangte Motor have been improved.This paper takes the performance change as the starting point,analyzes the reasons for the performance change after the commitment period of the acquired party and the economic consequences caused by the performance change,explores how to avoid the relevant risks in the M & A,and seeks solutions to the shortcomings,and provides some enlightenment from the perspective of the acquirer,small and medium investors and regulators.