Research On The Economic Consequences Of The Performance Change Of Fhilisense After The Performance Commitment Expiration

In recent years,Chinese capital market has continued to develop and grow,and mergers and acquisitions are an important means for listed companies to expand their scale and achieve strategic objectives.In mergers and acquisitions,signing performance commitments can alleviate the problem of information asymmetry between the two parties involved in the merger and acquisition process.The performance commitment of the acquired company to ensure its operating performance during a specific performance commitment period reflects the strong confidence of the transaction target in its own business development.However,with the fulfillment of performance commitments,issues such as inflated valuations caused by performance commitments and a decline in performance after the completion of performance commitments are gradually increasing.This harms the economic interests of both parties involved in the merger and acquisition,and to some extent,has had a negative impact on Chinese capital market,attracting widespread attention from scholars.This article combines research on performance commitment and performance change,and based on other relevant literature,uses event analysis,principal component analysis,and EVA evaluation indicators to analyze and explore the economic consequences of FHILISENSE’s merger and acquisition performance change after the performance commitment period expires.This paper mainly analyzes the economic consequences of M&A performance change from the short-term perspective and the long-term perspective.From a short-term perspective,after the expiration of the performance commitment period,the face change of the M&A performance of FHILISENSE caused a short-term negative market announcement effect,which brought negative impact on the company and led to the decline of the company’s share price;From a long-term perspective,after the expiration of the performance commitment period,FHILISENSE’s M&A performance changed,resulting in long-term poor performance,which had a relatively large negative effect on the company’s value creation ability,weakened the company’s value creation ability,and damaged the interests of small and medium-sized investors.Finally,in view of the problem that the M&A performance of FHILISENSE has changed after the expiration of the performance commitment,further suggestions are put forward from the perspective of FHILISENSE,mainly from the following four aspects: signing a reasonable and effective performance commitment,improving the company’s internal governance structure,strengthening the company’s information disclosure,and paying attention to the company’s medium and long-term development,which provides reference and reference for the realization of more valuable M&A.