A Study On The Risk Identification And Prevention Of China Literature’s Acquisition Of New Classics Media

In recent years,with the increasingly fierce market competition,mergers and acquisitions(hereinafter called M&A)has become the main way for the development of enterprises in the market,and has become increasingly fierce.On the one hand,M&A can reduce the barriers for enterprises to enter another industry and make it possible for them to diversify.On the other hand,M&A in the same industry can also produce synergy effect among enterprises,enhance their financial ability and operation ability.At present,the domestic and foreign scholars lack the study on the risk identification and prevention in the field of Internet culture enterprise M&A.In this context,based on the case of Yuewen group’s acquisition of Xinli media driven by the development of intellectual property(IP)right industry chain,this paper explores the risks behind the special acquisition of traditional film and television media companies by Internet culture enterprises,and tries to provide preventive suggestions.Firstly,this paper summarizes the domestic and foreign research status of M&A risk identification and prevention,and defines the research object of this paper.Then it combs the basic theories of M&A and its risk identification and prevention,which lays a theoretical foundation for the following research.Then,this paper gives a detailed description of the case about Yuewen group’s M&A of Xinli media.It not only analyzes the business direction and equity distribution of Yuewen group and Xinli media respectively before the M&A through the time line,but also describes the operation status of Yuewen group after the M&A through some financial indicators.As for the part of risk identification,this paper uses the segmented identification method,combined with the hierarchical holographic model(HHM),and divides the whole process of risk identification into former-merger acquisition-after the merger.For the former M&A,this paper mainly selects the financial indicators such as operating income,P/E ratio,net profit growth rate and stock price.We analyze the market risk,strategic risk and valuation risk during former M&A with the method of window slide analysis.In M&A,this paper mainly analyzes the payment risk and target setting through the fair value of cost liabilities and performance completion.For the post-merger risk,it can be divided into integration risk and goodwill impairment risk.For the integration risk,we select the gross profit rate of sales,return on assets,growth rate of operating revenue,growth rate of assets,growth rate of net profit and turnover rate of assets and other financial indicators to explore the operation synergy risk after mergers and acquisitions.Financial synergy risk is reflected through solvency.The goodwill impairment risk after M&A is identified by case analysis of its causes.For each identified risk,based on the existing macro preventive measures,combined with the case of this paper,the potential risk factors are deeply discussed,and the corresponding preventive measures are given.Finally,the paper puts forward that former M&A,enterprises should consider the market environment,make clear the position of the market,and make reasonable valuation.In the process of M&A,we should reasonably encourage the enterprises to be mergers and acquisitions to ensure their financial health.During the post M&A,we should pay attention to the coordination and Avoid impairment of goodwill.Through the application of risk identification theory and risk prevention theory to the case analysis,this paper systematically analyzes the risks and preventive measures in different stages of M&A,and provides some reference for the development of M&A enterprises in the cultural media industry,especially in the Internet literature industry.