Research On The Motivations And Risks Of ByteDance's Cross-border Acquisition Of Musical.l

The development of information technologies such as computers and big data has expedited the global progression of the digital economy,leading to a transformative shift in existing production and economic relations.The reconfiguration of the current economic order by the digital economy has manifested itself in various ways,with cross-border mergers and acquisitions serving as a significant manifestation of its globalization.As the primary agents of the digital economy,digital enterprises,leveraging their advantages in economies of scale and virtual economies,have emerged as major players in international development and are at the forefront of cross-border mergers and acquisitions.With the flourishing of China’s digital economy,Chinese digital enterprises have strategically embraced technology expansion and international development as the future trajectory of their companies.Among the various investment avenues,cross-border mergers and acquisitions have gained substantial favor among Chinese digital enterprises,solidifying their position as key participants in such transactions.Furthermore,propelled by the growth of mobile internet,China’s short video industry has rapidly gained momentum,prompting major players in this sector to adopt overseas expansion as a core strategic imperative.Byte Dance,a pioneering digital startup,has achieved remarkable success in a remarkably short period,establishing itself as the world’s largest unicorn enterprise and a shining example of international development within the Chinese digital business landscape.During Byte Dance’s internationalization journey,the pivotal acquisition of Musical.ly in 2017 played a transformative role in expanding its global footprint.Drawing upon this case study,this research examines Byte Dance’s motivations and risks associated with the merger,ultimately distilling valuable insights and lessons from its experience in cross-border mergers and acquisitions.The findings highlight that multiple factors propelled the implementation of this merger,including the acquisition of intangible assets,pursuit of complementary advantages,market entry strategies,seizing growth opportunities,and aligning with the company’s overall expansion plans.Analyzing the risks inherent in Byte Dance’s cross-border merger with Musical.ly across three stages – pre-merger,merger process,and post-merger – the study reveals the primary risks encountered.At the pre-merger stage,Byte Dance faced challenges such as competitive risks from rivals,information asymmetry risks,and political risks.During the merger process,financing risks and legal risks emerged as potential hurdles for Byte Dance.In the post-merger stage,risks associated with resource integration,cultural assimilation,management,and leveraging past experiences assumed pivotal importance in determining the success or failure of the merger.In response to these risks,Byte Dance proactively devised targeted strategies that effectively mitigated potential harm and facilitated smoother transitions.Based on the comprehensive analysis of motivations,risks,and risk mitigation measures related to Byte Dance’s cross-border merger with Musical.ly,this study provides valuable insights and lessons that can guide future cross-border mergers and acquisitions.