Research On Risk Assessment Of Traditional Enterprise M&A Internet Companies

With the development of Internet technology abroad increasingly,Internet enterprises become the targets which traditional enterprises want to buy in the West.Such as the famous large-scale cases: Wal-Mart M&A Number 1-Store,Nike M&A Fuelband,HP M&A Autonomy.These successful decisions make the acquirers occupy a broader market quickly,they also accelerates the pace of becoming international top enterprises.With the development of the Internet technology in China,the Internet enterprises grow up quickly.They can satisfy new needs of consumers and increase their market share.This situation affects traditional enterprises' market standing.In order to get out from the bottleneck of development and achieve diversification strategy,traditional enterprises choose to make mergers and acquisitions with Internet enterprise.However,this operating decision making mergers and acquisitions with a new industry will be full of risks.The main idea of this article is researching which kind of risk they will face when traditional enterprises make a decision to buy the Internet enterprises.I use the Fuzzy Comprehensive Evaluation Method to assess risk.Through the analysis of M&A market in our country,I found that the number and money of deals are both top in the rank table.At the same time,this economic behavior revealed a lot of different characteristics.In order to find the differences and assess the risks,I use two methods to classify the risk which traditional enterprises will face when they buy Internet enterprises.I assessed the risk by using the Fuzzy Comprehensive Evaluation Method.In the research process of Hua Lian buying "Elema",using Pacific Database,I selected 16 deals to be my objectives and analyzed financial index from 2009 to 2015 by using a scatter diagram.I choose representative index to be parameters in Fuzzy Comprehensive Evaluation Method.By using EXCEL and MATLAB,I figured up the important results.After making the comparison between the results of quantitative evaluation and physical truth,I can conclude that the Fuzzy Comprehensive Evaluation Method is suitable for traditional industry to assess the risk of buying Internet companies.By analyzing the data,I found some high risk points in the process of M&A.I put forward the suitable methods and important measures to cope with the risk of M&A.I hope this article can provide some new management ideas and good methods for traditional enterprises to make mergers and acquisitions with Internet enterprises.