Research On The Impact Of Cross Industry Mergers And Acquisitions On The Enterprise Value Of China Literature

In recent years,China’s Internet technology has developed vigorously.The Internet has penetrated into every corner of our lives.The contacts and exchanges between enterprises in the same industry and different industries based on the Internet have increased,gradually opening the era of diversified development.As one of the emerging Internet industries,online literature is developing rapidly and is at the intersection of strategic transformation.This paper selects the case of cross industry mergers and acquisitions of Xinli Media by China literature,the largest online literature enterprise in China,to study the impact of cross industry mergers and acquisitions on enterprise value,and to provide some reference for the development of other Internet enterprises.This paper first describes the research background and significance,then collects and sorts out the literature related to cross industry M&A and enterprise value,constructs the overall framework of the paper,then summarizes the theories related to enterprise M&A and enterprise value,combs the development background and current situation of China’s Internet industry and network literature industry,and the background and process of China literature’s M&A of Xinli Media,Combined with the current situation of the network literature industry and the business strategy of China literature,this paper analyzes the motivation of this merger and acquisition,and then analyzes the short-term and long-term impact of this merger and acquisition on the enterprise value using the event study method and the comparative analysis method.Finally,the paper selects the DEVA model to conduct a continuous evaluation and analysis of the enterprise value of China literature in the years before and after its merger with Xinli Media,and then combines the foregoing analysis of the merger motivation of China literature to obtain the impact of China literature’s merger with Xinli Media on its own enterprise value,and further analyzes the reasons for the impact.This paper draws two conclusions through the value impact and evaluation analysis of China literature’s acquisition of Xinli Media: on the one hand,from the perspective of short-term market response and long-term indicators,cross industry mergers and acquisitions need to face various risks in the target industry.When encountering market risks,cross industry mergers and acquisitions have a negative impact on enterprise value more than a positive impact;On the other hand,the calculation results of the DEVA valuation model show that the enterprise value of online literature is related to the enterprise’s unit user input cost,market share,user payment rate,average monthly active users,average user contribution value and other factors.The enterprise value in the DEVA valuation is affected by non-financial factors such as market share and user payment rate,and the enterprise value is not stable after mergers and acquisitions.Finally,based on the research results,this paper puts forward some countermeasures and suggestions on cross industry M&A,such as reasonable valuation,full understanding of cross industry areas and M&A in combination with enterprise strategic planning,to provide reference for other enterprises’ cross industry M&A activities.