Synergy Effect Analysis On Merger Of Youku And Tudou

Economic globalization is one of the most remarkable characteristics, which can’t be hold back and changeable. The most important one is Merges&Acquisition, M&A in short, which leads to the trend of global economy. Since China’s entry into Word Trade Organization (WTO), China’s economy can fully be connected with global economy and companies in China have involved in this M&A tide, with risks and challenges. Enterprises of these companies are also involved in fierce commercial business environment, witnessed the marked losing and plan to get into M&A market. They want to realize long-term strategy via Optimization of enterprise organization structure, reallocation of resources, comprehensively creating and enhancing the core competitiveness of the enterprise.Mergers and acquisitions create value through the synergistic effect, and it reflects the enterprise’s economic strength and international competitiveness. Synergistic effect is the foundation of the enterprise to realize the strategic goals of the merger and acquisition of expectations. Since Annsoff (H·Igor·Ansoff) explicitly proposed "synergistic effect" concept, a lot of people developed the concept, types and conditions of synergistic effect. This paper also agreed that synergistic effect decides whether M&A success or not. This article mainly used Fred’s theory which states that synergy effect mainly contains the management synergy, management synergy and financial synergy. Of course, synergistic effect is not confined to these three aspects. But this paper analyzed these three aspects of mergers.The combination between Youku and Tudou is one of the most important case in China’s online video market. In2005, China network video market was born since2005and has a fast development, and now China’s online video market gets gradually mature. Not only the number of video viewer increases, but the market pattern gradually appeared. A lot of small and medium-sized enterprise which cannot pay the powerful copyright tee and broadband tee, etc., will be eliminated; While other enterprises, who want to gain more market share and reduce the copyright fee and broadband fee of pressure, will get into the powerful combination way. The combination between Youku and Tudou is a typical example of powerful combination, as two top-ranked companies in China’s online video web market. Through the synergistic effect of powerful combination, it will give the network video market brings new life. This paper states synergistic effect of the combination of Youku and Tudou. and I believe that prospects of the online market will be better and better.This paper is divided into six parts. The first part is the introduction, expounding the background and significance of the paper, literature review, and the innovation and deficiencies of the paper. The second part expounds the theories of used paper. The second part is the theory, as it is, mainly the horizontal M&A theory and the three sources of synergistic effect, including management synergy effect, financial synergy effect and the management synergy effect. The third part analyzes the case. and get a briefly overview of the case through the analysis of Youku and potatoes company, and the definition of the relevant market. The fourth part analyzes the present situation of online video industry, as well as the relevant macroscopic policy. which is a policy guide of the development of the new company. The fifth part analyzes there synergistic effects. The six part puts forward the conclusion.Synergy effect theory is the basis of M&A strategy, and it is an important issue whether M&A can produce synergistic. This paper analyzes the specific synergistic effect, with the theory and the current the development of the online video market.