Research on Performance Commitment Agreement of Continuous M&A of Advertising Media Enterprises in China

Abstract

Due to the rapid development of advertising media industry, traditional media enterprises have to adopt M&A (mergers and acquisitions) to keep up with the speed of industry development. However, M&A, especially in a short period of time, is often accompanied by uncertain risks such as information asymmetry and difficult to predict future profits. Therefore, in order to avoid uncertainty risk, performance commitment agreement began to be widely used in media mergers and acquisitions. This paper takes the application case of Lianjian Optoelectronics to performance commitment agreement in continuous M&A, starting with short-term and shortterm performance analysis, performance commitment standard and original country. The purpose of this paper is to study the long-term and short-term impact of M&A application performance commitment agreement on company performance. The case study found that different performance compensation methods will have different effects on M&A risk, and the performance commitment agreement will greatly improve the long-term operating risk of the company.