Research On Risk Management Of KeHua Data’s Merger And Acquisition Of TianDi XiangYun Gambling Agreement

Due to the increasingly fierce market competition,more companies hope to expand their business scope through mergers and acquisitions.Successful mergers and acquisitions can exert synergy,but failed mergers and acquisitions usually cause losses to both parties.In order to ensure the smooth progress of mergers and acquisitions,there are more and more enterprises using the VAM in mergers and acquisitions.VAM can effectively adjust the valuation and effectively avoid the high premium valuation problem caused by information asymmetry.Cloud computing enterprises are emerging industries.Because cloud computing enterprises are asset-light enterprises,it is difficult to accurately value their assets,and it is easy to have high premium valuation and large goodwill in merger and acquisition transactions.Therefore,when merging cloud computing enterprises,the merging parties prefer to sign a gambling agreement to reduce the risk of merger and acquisition.More and more enterprises use the wager agreement,and the potential risks of the wager agreement are also exposed.Because China’s capital market has not yet formed a consensus on the understanding of the introduced wager agreement,most of the wager agreements have ended in failure,leading to the frequent occurrence of cloud computing enterprises causing losses to both parties due to the failure of the wager.Therefore,it is of great significance for both parties to identify the risks to the gambling association and study the risk prevention measures.However,the current research on the gambling agreement mainly focuses on the traditional manufacturing industry and the pharmaceutical industry,and the research on the emerging enterprises such as cloud computing is relatively small.The research on the gambling agreement risk mainly focuses on the analysis and research of the risks during and after the gambling period,and few scholars study the risks in the early stage of the gambling.However,with the increase of M&A activities in the cloud computing industry and the rise of the failure rate of gambling,the identification and prevention of the risks in the early stage of gambling for cloud computing enterprises is also particularly important,which can prevent the occurrence of the bad results of "high valuation","high premium" and "high performance commitment",and improve the success rate of M&A.Based on this background,this paper uses the method of case analysis to demonstrate the acquisition of Tiandi Xiangyun,which belongs to the cloud computing industry,by Kehua Data,and deeply analyzes the potential risks of signing a gambling agreement during the acquisition process.First of all,the relevant theories of the VAM agreement are explained by using the literature research method.Then,based on the information asymmetry theory,incentive theory and comprehensive risk management theory,the case of Kehua Data M&A Tiantianxiangyun is analyzed,and the reasons for enterprises to use the VAM agreement and the risks in the whole process of M&A are analyzed.The existing risks are identified and analyzed from the early stage of the VAM,the middle stage of the VAM and the late stage of the VAM.Secondly,this paper uses the method of comparative analysis to prove the risks found in the case analysis process by comparing the evaluation value-added rate,price-to-book ratio,operating income growth rate and other financial indicators in the merger and acquisition of enterprises in the same industry.Finally,based on the risk identification and analysis of the previous article,the risk prevention suggestions for each gambling stage are proposed.This paper combines theory with practical cases and draws the following conclusions:(1)The risks of Kehua Data’s acquisition of Tiantianxiangyun mainly include five risks: insufficient due diligence,high premium valuation,financing payment,poor resource integration effect and performance commitment compensation.Through the analysis of the case,cloud computing enterprises need to pay special attention to the risk of human resources integration.Technicians are the core competitiveness of cloud computing enterprises,and the loss of technicians should be prevented.(2)When Kehua Data carried out the merger and acquisition of Tiantianxiangyun,the reasons for the failure of the gambling agreement were as follows: failure to reasonably set the relevant provisions of the gambling agreement;Failure to set performance commitment targets reasonably.(3)According to the risk analysis,this study proposes the following measures to prevent the risk of gambling agreement: in the early stage of gambling,comprehensive investigation,reasonable valuation and diversified gambling indicators should be done to reduce the risk of enterprise selection;In the medium term of gambling,we should choose diversified payment methods of consideration and set the highest proportion of equity compensation to reduce the risk of financing payment and equity transfer;At the expiry stage of the gambling agreement,we should actively integrate and improve the measurement method of goodwill impairment,and innovate the compensation provisions of the gambling agreement to prevent the risk of substandard performance commitments and goodwill impairment.This paper hopes to provide reference for future cloud computing enterprises to use VAM by analyzing the risks of VAM in M&A transactions,and improve the efficiency of M&A market operation.