Motivation And Risk Analysis Of O2O Strategic Merger And Acquisition Of Internet Enterprises

Internet companies are more reliant on mergers and acquisitions to increase their customer base,explore new markets,maintain their growth rate,then build their own ecosystem.Today,it is very attractive to integrate O2 O strategic mergers and acquisitions which emerged in 2014.The flourishing O2 O business model has penetrated into various fields such as clothing,food,housing and transportation in life,and its development prospect has become an important driving force for China's Internet industry to expand its market and occupy the high point of competition.Especially for China's Internet giants led by Baidu,Ali and Tencent have accelerated their O2 O strategic mergers and acquisitions in recent years.They have entered into an intensive vertical and horizontal phase and actively snatch up potential targets in an effort to deploy their own O2 O ecosystem preemptively.Since such mergers and acquisitions are large in amount and extensive in scale,most of them are in the midst of unclear or unsuccessful future after mergers and acquisitions.This article selects Tencent's merger of 58.com as a typical case,and combines the characteristics of the Internet industry's O2 O strategy.The analysis finds that the main motivation for such mergers and acquisitions is to open its own large platform and cooperate with excellent partners in the industry to quickly enter the O2 O vertical field,obtain big data resources,and connect offline customers to close their own O2 O ecosystem.In this paper,the identification of M&A risk is summarized into the following five aspects:(1)acquisition target is not matching the strategic objectives;(2)the valuation of the emerging O2 O industry is difficult;(3)the subsequent earnings cannot remedy the high premium;(4)the O2 O market capital is desperately needed to be adjusted and upgraded;(5)the culture of founder Team is difficult to integrate.Therefore,this article proposes the following suggestions for the risk prevention of O2 O strategic mergers and acquisitions:(1)careful selection of M&A targets,(2)reasonablereduction of financial risks;(3)focus on post-merger operations,customer,manpower,and cultural integration,(4)strengthening the internal control of corporate.It is hopeful that the conclusions in this paper can provide reference for the O2 O strategic merger and acquisition of the Internet industry along with the orderly integration of the entire Internet industry in the future.