会计学院知识库

In the context of supply-side structural reforms, my country’s main economic goal is to achieve economic restructuring, promote the optimal allocation of resources, and improve the quality of economic growth. In this context, listed companies have become a trend in horizontal, vertical or mixed mergers and acquisitions in order to optimize resource allocation and adjust economic structure.In order to avoid high premium pricing and to protect the interests of enterprises and shareholders, premium adjustment and compensation mechanisms have gradually played an increasingly important role in mergers and acquisitions. However, high-commitment performance derives some other problems. Accompanied by the phenomenon of intensified performance commitments that are not up to standards and performance is not fulfilled, we need to re-examine and position the meaning and role of performance commitments. In recent years, two-way performance commitments have gradually attracted attention in the profit compensation agreement in mergers and acquisitions. The integration value of the merger is generally improved by bundling the profits of both parties to the merger. But is the motivation for the two-way performance commitments signed by both parties purely to increase the value of the merger? What economic effects will the signing of the two-way performance commitment bring to the enterprise?

This essay illustrates the background and purpose of the research and lists some representative research conclusions systematically by reading and organizing the literature which is related with performance commitments at first.Next elaborates the concept and characteristics of two-way performance commitment, and analyze the difference between single and two-way performance commitment. Then combined with the case of Kodak’s acquisition of five Internet companies such as Baifusi, the motivation was analyzed, and then the use effect of two-line performance commitment was analyzed with three parts which is the time node of the announcement of the purchase agreement, the performance commitment period and the two time periods after the performance commitment was completed. Finally, it is concluded that the two-way performance commitment can weaken the premium risk that only one party needs to bear, so that both parties can share risks, listed companies transmit positive messages to the stock market in order to raise the price of stock and promote its corporation value in a short period of time.The stock price makes its economic profits rise temporarily; it provides incentives to the target company’s management and increases its enthusiasm for business operations after mergers and acquisitions integration; reduces agency costs in terms of information acquisition costs and merger integration