Research On Overseas M&A Of Chinese Game Industry

In recent years,with the continuous promotion of the structural transformation of China's economic development and the upgrading of the demand for national culture and entertainment,China's game industry has always maintained a rapid growth.The development of mobile Internet and the popularity of smart mobile terminals have driven the transformation of PC to mobile phone games.As the domestic game market tends to saturate,game enterprises have began to seek the opportunities to layout the overseas market,complete the technology upgrade and internationalization transformation with the assistance of capital.As a matter of fact,the overseas merger and acquisition of the game industry has been very active in recent years.With acquisitions of games companies such as Epic Games and Riot Games,Tencent has established itself as an industry leader in computer client-side games around the world.In June 2016,Tencent paid $8.6 billion for an 84.3%stake in Finnish mobile games developer Supercell in order to expand its market share as well as influence in mobile gaming and accelerate its presence overseas,which has created a representative event for Chinese game industry overseas merger and acquisition.When overseas mergers and acquisitions involves two or more countries'enterprises,markets and legal systems,it will be a professional investment activity which is in need of the actual operation of complex and high professional requirements,and its high reward also means high risks.Nevertheless,there are few researches on overseas M&A in game industry in China at present.Based on the theory of M&A and overseas M&A,this paper starts from the status quo of overseas M&A of Chinese enterprises and China's game industry,with the analysis of the case of Tencent's merger and acquisition of Supercell,this paper illustrates the motivation and performance of overseas mergers and acquisitions in China's gaming industry.The study finds that Tencent's merger and acquisition of Supercell is based on Tencent's open development strategy,global strategic layout and strategic choices to respond to changes in market trends.Tencent's acquisition of Supercell has produced positive M&A performance and synergy during the observable period.First of all,the research background and research structure are introduced.Then it put up with the relevant theories of M&A and overseas M&A in the second part.Hereafter the third part analyzes the status quo and risks faced by Chinese enterprises' M&A overseas.Fourthly,it introduces the current situation of Chinese game industry development and M&A motivation,and then draws a series of beneficial enlightenment to Chinese game industry overseas M&A by the analysis of motivation and performance evaluation of the case.Finally,the paper concludes and prospects for the research.