An Emprical Study On The Financial Impact Of Mergers And Acquisitions Of China's Internet Listed Companies

It has been only more than 20 years since China's Internet industry started.It has made great progress and has changed people's life from every aspect.With the popularity of the mobile Internet and the "Internet+",the future of the Internet industry has become more and more broad.With the rapid expansion and fierce competition,cases of merger&acquisition in this industry is increasing.However,the real effects of these M&A cases are still not known,which has attracted the attention of all walks of life.This paper aims to explore the financial influence of M&A cases in the Internet industry with the method of literature research,empirical analysis and case study,trying to draw credible conclusions and provide reference and guidance for other companies in the industry.Firstly,this paper summarizes the definition,motivation and types of M&A.By combining the theories of M&A and the characteristics of the Internet industry,the general motivations and characteristics of M&A in the Internet industry are made clear.Meanwhile,an overview of current study on M&A,especially M&A in the Internet industry was given,which provides a theoretical basis for the empirical analysis.Secondly,according to the financial characteristics of the Internet industry,we choose 11 financial indicators from four aspects:profitability,debt-paying ability,operation capacity and growth ability to build evaluation system.Among the Internet M&A cases in 2012-2014,32 eligible enterprises were selected.Based on the financial data of these companies,a factor analysis was done and a overall conclusion was drew from it.The conclusion is that the financial performance declines linearly in the merger year and the year after,and for the second year after the merger,financial performance tends to be smooth.Then after paired significance tests towards the 11 financial indicators,we found that profitability and solvency decreased significantly,and business capacity slightly improved and growth ability is not promising.After that,a case study about IFLYTEK company was made to make up for deficiencies of the overall analysis which is too general and can not reflect the specific problems.Lastly,a systematical summarize of the above conclusions is presented.Based on that,this paper suggests that for future M&As,managers should make the incentives clear and strengthen post merger integration.According to the shortcomings of this research,three research suggestions for future researchers are put forward,which are paying attention to industry giants,extending observation window period and considering important non-financial indicators.