Research On Financial Risk Management Of Giant Network’s Cross Border M&A Of Playtika

As the opening up of China’s reform and opening up,the "one belt,one road" and the "cultural go out" strategy are being further promoted,more and more domestic online game companies have gone abroad and opened up overseas acquisitions.However,in the process of overseas M&A,many enterprises take advantage of the boom and go back,which seriously restricts the subsequent healthy development of enterprises.Risk is the key influencing factor throughout the process of online game enterprises’ overseas M&A,and more and more presents the characteristics of overlapping existence and cross influence.Giant network has been seeking high-quality M&A targets since its backdoor return to RMB common stock market in 2016.Playtika’s cross-border M&A,with a total amount of more than 30 billion yuan,lasted more than five years,and there are a lot of financial risks in the process of M&A.Therefore,this paper selects the giant network cross-border M&A Playtika as the research object,and studies the financial risk management of its cross-border M&A.Firstly,on the basis of combing the relevant literature of financial risk of overseas M&A of online game enterprises at home and abroad,this paper determines the relevant concepts and basic theories of overseas M&A of online game enterprises,and combs the theory of overseas M&A,risk management theory and basic process of risk management.Secondly,starting from the basic situation of both sides,this paper combs the process of giant network’s acquisition of Playtika company,and analyzes the motivation involved in the whole acquisition process.Thirdly,this paper identifies and analyzes the financial risks of Giant Network’s merger and acquisition of playtika,and uses AHP to evaluate the financial risks qualitatively and quantitatively.Finally,the paper analyzes the risk management strategies adopted by giant network in the acquisition process for the four major risks,points out the advantages of its management strategies and the problems that still remain unsolved,and puts forward the revised and improved risk management solutions on the basis of the corresponding risk management strategies of giant network.There are four major financial risks in this cross-border M&A Case: regulatory risk,pricing risk,financing risk and payment risk.Among them,the biggest impact is pricing risk.In the further detailed research,the legal supervision risk has the greatest impact in the supervision risk;the goodwill impairment risk has the greatest impact in the pricing risk;the pending litigation risk has the greatest impact in the financing risk;and the cash shortage risk has the greatest impact in the payment risk.In this regard,giant network needs special attention.Taking Giant Network’s acquisition of Playtika as the breakthrough point,study the financial risk management of overseas M&A,and explore the existing problems in risk managements,sum up experience and draw lessons,strengthen the Giant Network’s own risk management ability,and lay a solid foundation for overseas M&A that may continue to appear in the future.