A Study On The Motivation And Performance Of Yuewen Group’s M&A Of Xinli Media

In 2016,the country first put forward the concept of "digital creative industry" and made it one of the five pillars of China’s strategic emerging industry development,marking the formal entry of China’s cultural and creative industry into the digital era.At the same time,with the upgrading of consumption,the traditional entertainment consumption model can no longer meet the needs of consumers,resulting in the ceiling of China’s traditional cultural and entertainment segments becoming apparent.Therefore,driven by policy guidance and changes in the consumer environment,the concept of "new culture and creativity" has emerged,and Chinese cultural and entertainment companies have been engaged in M&A activities to participate in the strategic layout of "new culture and creativity" by expanding the IP industry chain.This paper adopts a case study approach to analyze the motivation and economic consequences of the M&A activities of Chinese cultural and entertainment companies for the layout of the "new culture and creativity" strategy,so as to explore the practical significance of these M&A activities.Specifically,this paper uses the event study method and the balanced scorecard to construct a multidimensional indicator evaluation system(covering short-term market performance and financial,customer,internal process,growth and learning dimensions,combining financial and non-financial indicators,internal and external factors)to evaluate the long-term and short-term performance of M&A activities.In addition,this paper further explores the factors behind the changes in M&A performance and the management level of enterprises,and summarizes the experiences and lessons learned in an attempt to provide reference for Chinese cultural and entertainment enterprises in their cross-industry M&A and "new literary creation" strategies.In this paper,the case of the acquisition of a well-known film and television company,Xinli Media,by the largest online literature company,Read Write Group,is selected as the object of study.First of all,the motivation of M&A is explored with the characteristics and development trend of China’s cultural entertainment industry.Second,this paper also evaluates the M&A performance from both shortterm and long-term perspectives,and concludes that in the short term,the M&A activity has negatively impacted the short-term market performance and short-term financial results of Read Write Group;after excluding some temporary factors,the M&A may have been over-valued and unfavorably integrated.However,in the long term,the acquisition has helped Read Write Group improve its revenue structure,enhance its content library’s ability to cash in,and help it gain control of the adaptation process and penetrate deeper into the IP industry chain,enabling it to effectively advance its "new literary creation" strategic layout.Overall,the acquisition is in line with Read Write Group’s expansion strategy,making it the leading player in Tencent’s "new literary and creative" strategy,and with the integration of the acquisition,Read Write Group’s future financial indicators and market performance is expected to improve.The innovation of this paper is as follows:(1)At present,domestic academics are less concerned about the impact of M&A activities in cultural entertainment and other asset-light industries on the performance of the main merger.This paper analyzes the impact of M&A activities on the performance of Read Write Group through the specific case of its acquisition of Xinli Media,and sorts out the integration measures and summarizes the experiences and lessons learned,enriching the research related to M&A in light-asset industries and providing realistic references for other corporate M&A with similar characteristics.(2)The existing literature has a single means of assessing M&A performance,mainly by analyzing changes in historical financial data,which cannot comprehensively reflect corporate development prospects or assess the value of off-balance-sheet intangible resources.Therefore,this paper constructs a multidimensional index system to comprehensively evaluate the M&A performance of the principal mergers from both short-term and long-term perspectives,combining financial and non-financial indicators,in order to provide a complement to the research related to M&A performance.