Research On The Impact Of Valuation Adjustment Mechanism On Enterprise Financial Risk

With the implementation of the new “Management Measures for Major Asset Restructuring of Listed Companies”,the use of VAM has become an indispensable part of asset restructuring transactions of listed companies,but its effect often deviates from the original intention,worsening the financial status of both parties to the merger and acquisition,especially for the target enterprise.Many target companies will experience financial slippage and rising financial risks after gambling,which will affect the subsequent development of both parties to the merger.From the perspective of the Acquired parties,this paper studies the impact of M&A and restructuring using VAM on the financial risk of the target enterprise,and puts forward suggestions for improvement.This paper selects the listed companies that conducted VAM in A-shares from 2014 to 2021,uses the fixed-effect model to conduct empirical analysis,demonstrates the relationship between the signing of VAM and the financial risks of the target enterprises,and also conducts heterogeneity analysis and lag effect analysis,and finally concludes:(1)the signing of VAM will increase the financial risks of the target enterprises;(2)the larger the target enterprise,the greater the negative impact of the VAM;(3)The negative impact of the VAM will continue until the year following the end of the VAM.Based on the empirical results,the case of the gambling between Yaxia Auto and Zhonggong Education was selected as a case study,and the impact of the VAM on Zhonggong Education was analyzed,and the conclusion of the case was consistent with the empirical research conclusion,that is,the signing of the VAM increased the financial risk of ZB.Based on the empirical evidence and case analysis results,this paper puts forward the following suggestions: regulators should further improve the information disclosure system of listed companies,consider setting up professional M&A service intermediaries,and strengthen the punishment for credit disclosure violations in the application of VAM;Acquirers should do a comprehensive investigation and encourage the participation of repeated game mechanisms;Target enterprises should agree on reasonable gambling targets,formulate sustainable development plans,and eliminate violations of trust and disclosure.