Jingdong Merger Case Analysis

In recent years,as the “Internet +” program moves forward,e-commerce industry grows rapidly in China.The M&A market is very active.This thesis selects a representative e-commerce company-Jingdong,and discusses the motives,process and economic consequence of its strategic acquisitions.It aims to provide theoretical and practical reference for Internet companies on strategic acquisitions.The thesis analyses Jindong's acquisitions along the lines of “motives-process – consequence”.First,the thesis explores the motives of acquisitions with Jingdong's strategic objectives.Second,the thesis combs the process of Jingdong's acquisitions.Third,the thesis tests the consequence of Jingdong's acquisitions by non-financial indicators(market share,active user number and enterprise value)and financial indicators(profitability,operational capacity,growth and free cash flow).In the end,the thesis provides Jindong three suggestions on the future directions of acquisitions.This thesis argues that the results of the merger of Jindong are mixed.There are five positive effects.First,Jingdong smoothly enters the markets of O2 O,OTA and international finance.Second,Jiongdong increases its bargaining power with the upstream suppliers and the downstream customers.Third,Jingdong completes the industrial chain.Fourth,Jingdong obtains the WeChat flow entrance and Wal-Mart's off-line strength.Fifth,Jindong improves the valuation.There are also three negative effects.First,acquisitions of Dada Logistics and Yi Xun Logistics haven't produced scale-effect,and the operating-cost doesn't decline.Second,the closure of the Paipai network caused impairment of the goodwill and intangible assets and led to large losses.Third,the flow effect of WeChat is lower than expected,so high growth rate of GMV could not be maintained.In conclusion,the objective of strategic merger is not the short-term benefit,but the long-term positive effect.