Study On Merger & Acquisition Performance Of Alibaba Based On EVA Method

Since 2014,Alibaba has made a series of M&A transactions in China and abroad for the long-term development strategy of the enterprise.However,the concrete effect of M&A on the business development has been unknown.Considering shareholders capital investment,this study uses EVA indicator evaluation method to study the M&A performance,so as to evaluating Alibaba's M&A performance reasonably,and finds problems as well as provides reasonable countermeasures in final.This paper introduces the enterprise overview and development strategy of Alibaba,uses the M&A motivation theory to analyze of different M&A types of Alibaba,finds and summarizes the specific M&A motivations.Then this paper calculates the EVA value and EVA evaluation indicators of Alibaba from 2012 to 2015 according to EVA theory,comparing the performance of traditional financial analysis method,reveals the real performance of the M&A transaction,then puts forward the countermeasures and suggestions.The study finds that the Alibaba's main motivation of a large number of M&A transactions lies in five,including to build a benign development of the Alibaba ecosystem,to improve the competitiveness of E-commerce core business,to occupy mobile and big data terminals,to expand the product market and gain new profit growth,as well as to digest large cash balances and increase rate of shareholder return.The results show that the impact of M&A transactions to Alibaba mainly covers 2aspects.On one side,the economic value added(EVA)and EVA rate of return declining year by year shows that the return of capital is low and M&A transactions did not create appreciable value to shareholders.On the other side,the operation efficiency of enterprises dropt but the capital cost of enterprise got high.This research use EVA evaluation method to analyze the M&A performance of Alibaba,and comparing the traditional financial indicator analysis method and EVA's indicators under the same index but different calculation caliber,reveals the real performance of M&A in creating value and using enterprise capital effectively.This case studies the M&A performance of giant e-commerce enterprises like Alibaba enriching the case library of E-commerce and internet M&A performance.