Research On Risk Identification And Response Of M&A Performance Commitment

With the increasingly frequent M&A transactions in China’s capital market in recent years,more and more enterprises hope to achieve their strategic objectives through M&A transactions.However,the M&A risks such as overestimation caused by information asymmetry have also brought many negative effects to M&A enterprises,and even related to the success or failure of M&A.therefore,M&A risks have gradually attracted more and more attention.Performance commitment is widely used in M&A transactions because of its role in dealing with M&A risks.At the same time,performance commitment has also produced many problems in practical operation.In recent years,problems such as overestimation,goodwill impairment and performance change caused by performance commitment have emerged one after another in the capital market,indicating that performance commitment not only did not avoid M&A risks,but also dragged down the performance of the acquirer and affected the normal operation of the acquirer.It can be seen that improper application of performance commitment will also bring great risks.Therefore,it is necessary to identify the performance commitment risk,study the response strategies to the performance commitment risk,and reduce the adverse impact of the performance commitment risk on the acquirer,so as to improve the performance commitment mechanism.Using the methods of literature research and case analysis,this thesis focuses on the performance commitment risk faced by the acquirer in the M&A transaction,taking Ecobeauty M&A of Bada garden as an example.According to the relevant literature read and the research on previous relevant cases,we can know that there are many kinds of performance commitment risks,which can occur in various stages from the signing of the performance commitment agreement to the expiration of the performance commitment.The types of risks that may occur in each stage are different.Therefore,this thesis will identify the performance commitment risk faced by the acquirer’s Ecobeauty in stages.It is hoped that through the research on the identification and response strategies of performance commitment risk faced by Ecobeauty as the acquirer in this case,it can provide some reference for the acquirer in future M&A transactions in identifying and responding to performance commitment risk.Firstly,this thesis introduces the relevant research background and research status at home and abroad,and expounds the research significance of this thesis.Secondly,it introduces the related concepts and theoretical basis involved in this thesis;Secondly,it introduces the case of Ecobeauty’s merger and acquisition of Bada garden,and then identifies the performance commitment risks faced by Ecobeauty during,during and after the expiration of performance commitment.After analyzing the causes of each risk,this thesis puts forward countermeasures for each risk.Finally,this thesis summarizes the conclusions of the case study,and provides risk response ideas for other M&As to how to deal with the performance commitment risk.