E-commerce Enterprise Overseas Mergers And Acquisition Motivation And Risk Analysis

Along with the updation of Internet technology and the popularity of smart devices,worldwide penetration rate of Internet is ever increasing.For people's daily life,one major change is the rising of e-commerce,through which people can buy things anytime and anywhere.Also,for big brands,merchants and SMEs,they can easily reach consumers and sell products to them through e-commerce platforms at a low operating cost.At the same time,as economic globalization proceeds,more and more Chinese enterprises begin to expand globally through foreign direct investment,including cross-border M&A.Of all the Chinese enterprises that have globalization strategies,Alibaba is a very successful example.In April 2016,Alibaba acquired the controlling stake of LAZADA,a major e-commerce company in Southeast Asia,which means Alibaba's official entrance into Southeast Asia market.Based on existing literature on cross-border M&A,this thesis aims to discover the motivations and risks of the cross-border M&A transaction between Alibaba and LAZADA.This thesis contains eight parts.The first chapter is introduction,explaining the background,significance,creative features and difficulties of this research.The second chapter is the review of literature on cross-border M&A theories.The third chapter analyses the motivations and risks of cross-border M&A of e-commerce enterprises.The fourth chapter gives the background information about Alibaba,LAZADA and the M&A transaction.The fifth chapter examines the motivations why Alibaba acquires LAZADA's controlling stake.The sixth chapter investigates the risks accompanying the transaction.The seventh chapter discusses how Alibaba can prevent these risks.The eighth chapter is the conclusion.This paper concludes that the major motivations of Alibaba to acquire LAZADA include:(1)to expand into oversea market,(2)to increase exports,(3)and to enrich its business model.The major risks are:political risk,technological risk,payment risk,operational risk,cultural risk and human resource risk,also concerns to the risks that may caused from M&A in order to prevent those risk in the future.Although M&A can lead to synergies to both sides of the transaction,if risks are not identified,prevented and dealt with carefully,they can turn the transaction to a failure.