Analyze The Causes And Risks Of Internet Enterprise Merger

China's Internet industry has developed rapidly and become an important support for the country recently.On the one hand,the market competition became increasingly fierce,and network companies began to enter the consolidation stage of rational allocation of resources.On the other hand,investors are also beginning to move towards rationality,returning to traditional investment concepts such as emphasizing profits and cash flow,and paying attention to corporate management.It is too expensive and risky for Internet giants to exploit the market directly,so the most direct and effective means is merger and acquisition.At this time,the objects worthy of acquisition have already had mature business models and stable income,and the acquisition behavior has become more rational.At the same time of the rapid development of China's Internet enterprises,there are also many deficiencies,such as the replication of products and services abroad,immature profit model,high degree of homogeneity,lack of core technology research and development ability,facing huge regulatory risks and so on.With the emergence of Internet companies,a variety of mergers have followed.Merger is the inevitable result of competition development in each segment of Internet market.Nowadays,compared with traditional enterprises,Internet companies,especially mobile Internet companies,are innovative enterprises that make full use of new Internet technologies and e-commerce,and grow up after relatively full free competition in the open and perfect market mechanism.Their operation mode is more novel and their growth speed is faster.In the case of rapid changes in technology and market,they have a stronger desire to achieve enterprise development through merger and reorganization.At present,the m&a of Internet enterprises in China is dominated by foreign capital and frequently acquired by domestic enterprises.The types of mergers and acquisitions are mainly horizontal mergers and acquisitions,while vertical mergers and acquisitions are increasing gradually,which means that Chinese Internet enterprises are extending from the pursuit of expanding scale to the integration of industrial chain and diversification.On the one hand,these merger events can bring synergies and add value to the enterprise.On the other hand,merger will inevitably bring risks to the company and lay hidden dangers.Taking the merger of Meituan and dianping as an example,this paper analyzes the motivation of Internet enterprise merger and identifies the risks of Internet enterprise merger,hoping to provide some reference value for Internet enterprise merger.Early theories about the incentives and risks of mergers in traditional industries were rich.However,as the Internet industry is an emerging industry,especially in recent years,relatively little research has been done on the emerging mobile Internet industry serving people's clothing,food,housing,transportation and other aspects.Therefore,this paper hopes to take the merger of Meituan and dianping as an example to put forward its own views on the motivation and risks of the merger of the emerging Internet industry,so as to enrich the research on enterprise merger theory.Based on the operation characteristics and competition status of the Internet industry,this paper makes a comprehensive discussion on the merger motivation and risk of Internet enterprises,selects the merger cases of Meituan and dianping as the research object,and analyzes and discusses the merger motivation and risk of Internet enterprises in a point-and-point manner.First of all,the relevant theories of enterprise merger are analyzed,which lays a theoretical foundation for the writing of this paper.Secondly,in the case of the merger of Meituan and dianping,the motivation of the merger was analyzed from the perspectives of competitive pressure,cost saving,market share expansion and investors' promotion,and then the risk of the merger was analyzed from the aspects of personnel,business and culture integration risk and monopoly risk.Through analysis,it is found that although the combination of Meituan and dianping has reduced the cost of competition,consolidated the market position and contributed to the realization of scale economy,it has brought risks to the new company in terms of operation and management.Finally,on the basis of a comprehensive analysis of the case,the paper proposes rectification Suggestions and risk prevention measures for the merger of Internet enterprises,discusses the future development situation of the Internet industry,and draws research conclusions.In this paper,we proposed the following two research methods:literature research:in this paper,through collecting and reading lots of literature at home and abroad,related concepts and theoretical achievements of enterprise merger to comb,understand and focus on empirical and case research about enterprise merger,both at home and abroad to business combination had a deeper understanding,motivation,and risk analysis has laid a theoretical basis for thesis writing.Case study method:this paper selects the merger cases of Meituan and dianping that have attracted high attention recently for research,and analyzes the motivations and risks involved in the merger of Internet enterprises.Through the in-depth analysis of this case,a general conclusion is drawn,so as to provide a reference for the merger of other Internet enterprises and industry integration.Although there are many studies on the causes and risks of merger events of listed companies or other traditional industries at home and abroad,few studies have been conducted on mergers of these emerging Internet enterprises,as video and audio software,taxi-hailing software and group-buying software are newly emerging applications.Therefore,the research in this paper is to apply the original merger motivation and risk related theories to the emerging Internet industry to further improve and supplement it.