Study On Financial Risk Management Of Internet Companies’ M&A

Premier Li Keqiang in 2014 government work report, with particular emphasis on "in order to survival of the fittest stick through market competition, we encourage corporate mergers and acquisitions" thus to accelerate industrial upgrading and the optimal allocation of resources. In recent years, the rapid development of China’s Internet industry, competition and incentive, more frequent mergers and acquisitions, both the number of mergers and acquisitions or transaction amounts are to achieve rapid growth. However, the Internet company’s own characteristics determine the merger itself is a very complex economic behavior, contains a large number of potential financial risks of the Internet industry merger failures caused a lot of our concerns about its acquisition of financial risk.Paper is divided into four chapters. Chapter 1 discusses the writing background, meaning the situation at home and abroad, and explains the research and innovation framework articles. Chapter 2 introduces the overview of mergers and acquisitions, risk management, financial risk management and content of the theory, and the theory expounded above logic and acquisitions of financial risks. Chapter 3 analyzes the competitive environment and industry characteristics of the Internet industry, and then we analyze the current situation of China’s Internet and characteristics of mergers and acquisitions, on this basis, we analyze the main financial risks faced by the Internet industry’s M & A process. Chapter 4, we selected Baidu acquired 91 wireless, in-depth analysis of Baidu in the process of acquisition of 91 wireless company’s financial risk identification and analysis, risk assessment and the share price reflects the whole process of risk control, supervision and other risk management reflects. In the case analysis we get some enlightenment as follows:On financial risk identification, the paper argues that financial risk management is a systematic project, throughout the entire M & A activity, while corporate strategic choice and goal setting is the starting point for mergers and acquisitions of financial risk analysis. Financial risk assessment, Internet M & A financial risk assessment method is more suitable for qualitative methods; great financial valuation model limitations, you should consider the time premium, strategic synergy premium price reflects the impact of the risk assessment and other factors. Financial risk response, the major Internet companies take risk reduction strategies. Internet M & A business can reduce risk by adjusting the capital structure, in addition to professional advisory body should pay attention to financial risk control function. Financial risk monitoring, should establish a sound financial risk monitoring mechanism and information feedback mechanism, focusing on monitoring the post-merger integration risk enterprise.