Research On The M&A Performance Of Zhongsheng Pharma From The Perspective Of Performance Commitment

With the increasingly fierce market competition,enterprises are eager to occupy the market quickly,so many enterprises are keen on M&A transactions.Mergers and acquisitions not only help the integration,scale expansion and development of the assets and technologies of the master and acquired enterprises,but also provide new impetus for the acquired parties.Due to the co-existence of benefits and risks in mergers and acquisitions,no matter what kind of investigation and evaluation method is adopted,the understanding o f the target enterprise is far from as comprehensive as the information mastered by the management of the target enterprise.To reduce the information asymmetry caused by the m&a risks,ensure the quality of target enterprise operation,protection of rights and interests of minority shareholders,and performance commitment method is widely used in mergers and acquisitions,the merger and acquisition both sides have different constraints and incentives,can effective prevention and control in the process of mergers and acquisitions of risk,to promote and ensure the deals would be able to complete.Pharmaceutical manufacturing industry due to the particularity of its industry "eternal sunrise industry",pharmaceutical enterprise need to keep the steady growth and increase its market share,but as a result of r&d investment,high barriers,income uncertainty etc,pharmaceutical companies are keen to mergers and acquisitions to expand,causing trading prices higher,accompanied by high premium features.Therefore,some pharmaceutical enterprises attach performance commitment to M&A transactions,and in-depth study of m&a performance after the application of performance commitment is helpful to adjust the m&a strategy and improve the competitiveness of the company.In this article,through analysis of Zhongsheng Pharma performance promise way to use in mergers and acquisitions under Xianqiang Pharmaceutical case,first to explore the medicine manufacturing industry using the performance pledge role in mergers and acquisitions,standard case,the performance commitment on line changes at different stages of enterprise m&a performance,to other companies as using performance promises to give reference in mergers and acquisitions.First,by reviewing literatures about performance promises and m&a performance,combined with related theories,found that the main and side are based on information asymmetry performance of mergers and acquisitions in the form of promised performance commitment is not only beneficial to mark to the main business and enterprise sustainable development of the signals and the market,also can inspire mark management actively complete performance targets,To a certain extent to protect the interests of the main party.Secondly,it analyzes the status quo of mergers and acquisitions of listed companies in China and the application of performance commitment,and finds that the situation of stepping on the line is prominent.Then it analyzes the typical case of the merger and acquisition of Xianqiang Pharmaceutical,and analyzes the impact of the merger and acquisition performance at different stages through the combination of financial and non-financial.Early studies have found that mergers and acquisitions,the market for Zhongsheng Pharma attached performance promise positive reaction of mergers and acquisitions,mergers and acquisitions late performance commitment period can lead to better performance,after the expiration of Xianqiang Pharmaceutical management problems,poor performance,causing large goodwill impairment provision,for Zhongsheng Pharma buried a huge risks during the continuous and stable development.Finally,based on the research conclusions,some suggestions are put forward for listed companies in m&a and the use of performance commitment.Through research enterprise is relatively commonly used in mergers and acquisitions performance commitment mechanism,analysis of the results after signing the commitment how benefit for the enterprise,through an analysis of on line standard,hoping to help enterprises to rational view and use of performance pledge,reduce the loss caused by the improper use,greatly to exert its positive effects on mergers and acquisitions.