Research On Financial Risk And Prevention During M&A Of Internet Enterprises

The trend of economic globalization promotes the development of the Internet industry.Nowadays,the popularizing rate of mobile phone and computer getting higher,and the emergence of big data and cloud computing makes people pay a lot of intention in this area.No one can forecast the ceiling for the development of Internet enterprises.With the development of the Internet,the number of Internet companies increase quickly.The Internet industry is a naturally fertile ground for merger and acquisition(M&A)just because of the high-speed growth model and fast update of information technology.2013 is an important year for Internet companies in M&A.Baidu,Tencent and Alibaba,which lead the development of chinese Internet industry has begun their competition in M&A.Internet companies used M&A to get the data resources,increase user stickiness,improve the market share,strength the technical level and step into a new field.In the year of 2015,the State Council issued a document about how to promote the integration between Internet companies and traditional industries.However,we cannot ignore the financial risk during the process of M&A.This article is divided into six chapters.Chapter 1 describes the research background and significance about financial risk during M&A.In chapter 2,the essay introduces the basic theory of mergers and acquisitions and the financial risk during M&A,to lay a solid theoretical foundation for this article.In chapter 3 and chapter 4,the article analyzes different types of financial risk the Internet companies may face during mergers and acquisitions,and provides some precautionary measures.Chapter 5 is to analyze the case of the M&A between Alibaba Group and China Vision.Based on the analysis of the background,motivation,process of the acquisition,we concluded that the merger may face the risk about the choice of the enterprise,the high valuation,the financing and payment and integrate.We analyze and evaluate the strategy of Alibaba to control the financial risk in this acquisition.And we found that the way which Alibaba chooses to lower the risks is useful.Chapter 6 is the conclusion and revelation of the article.Hope to play a good demonstration effect for the M&A between Internet companies in the future.