Financial Risk Research Of Alibaba's Acquisition Of Youku Tudou

With the development of Internet economy,mergers and acquisitions of Internet enterprises are very common in domestic mergers and acquisitions cases.Internet enterprises have abundant cash flow.In order to expand their scale as soon as possible,most of them choose to merge and acquire Internet enterprises in different business areas to realize their business diversification.In recent years,Alibaba has invested many aspects to improve its industrial chain to form Alibaba ecology.And it has constructed the Ali recreational sector,including film and television,sports,music and others gradually formed a system.The perfection of network video industry is an important link to supple its entertainment sector.Therefore,Alibaba's acquisition of Youku can be said to be an important step to improve its entertainment sector.Alibaba's acquisition of Youku involves a huge amount of money.This paper takes Alibaba's acquisition of Youku as an example to study the financial risks in the process of acquisition,which risk is also representative in the case of Internet mergers and acquisitions.And the corresponding risk prevention measures are given according to the possible financial risks.This paper mainly studies in the following three aspects.Firstly,this paper describes the motivation and process of Alibaba's acquisition of Youku,and introduces the company status,pre-acquisition financial situation and financial strength of Alibaba and Youku respectively.Then it analyses Alibaba's entertainment strategy,the motivation of mergers and acquisitions and the operation process of merger and acquisition.Secondly,this paper makes a qualitative analysis of the financial risks in the process of M&A from three stages.The first stage is the valuation risk before merger and acquisition,the second stage is the analysis of financing and payment risk in M&A,and the third stage is the analysis of integration risk after M&A from the operation ability,solvency ability and profitability of enterprises after M&A.Then through quantitative analysis by using Z-Score model to evaluate the financial risk of the whole process of M&A.Finally,the paper gives corresponding suggestions on the financial risks in the process of Alibaba's acquisition of Youku,such as preventing valuation risks,financingand payment risks.In addition,the risk control measures are given for the possible financial risks in the future M&A process of other Internet enterprises,which has reference significance for the control of financial risks in M&A of other interconnected enterprises.