Research On The Motivation And Performance Of Xunyou Network Technology Corporation’s Acquisition Of LionMobi

Merger and acquisition is an important way for enterprises to achieve growth.With China’s economy entering a stage of high-quality development,the M&A of Chinese enterprises at home and abroad shows a continuous growth trend.While the existing M&A promotes the growth of enterprises,there are also improper M&A such as following the trend and arbitrage.Therefore,it is of great theoretical and practical significance to study the merger and acquisition of enterprises.In recent years,with the rise of knowledge economy,network economy and platform economy,M&A of high-tech enterprises in the Internet industry are particularly active.These mergers and acquisitions are usually characterized by high premium and high risk.The research on this M&A has practical significance for promoting the better development of high-tech enterprises.The research also has certain theoretical value for understanding the M&A of Chinese Internet high-tech enterprises.Besides,it’s meaningful for similar enterprises to improve M&A performance.This study takes the acquisition of Chengdu LionMobi Technology Co.,Ltd.by Sichuan Xunyou Network Technology Co.,Ltd.as the research object.For research purposes,this paper reviews and combs the process of merger and acquisition.This paper analyzes the motivation of merger and acquisition from three aspects: integrating resources,optimizing business structure,and preventing the decline of growth.On this basis,the short-term and long-term performance of M&A is analyzed by using event study method,financial index analysis method,economic added value method and income structure analysis.The analysis found that in the short term,the proportion of Xunyou Technology’s mobile business has increased,and the performance structure has been optimized after the merger.In the long run,mergers and acquisitions have improved the short-term solvency and operational ability of Xunyou Technology,but have an adverse impact on the long-term solvency,and the economic added value has dropped significantly.M&A has positive and negative effects on profitability and growth ability,which shows that there are other factors that have an impact on M&A performance.Mergers and acquisitions have no obvious effect on Xunyou Technology’s integration of resources,optimization of business structure and prevention of the decline of growth.According to the research,the reasons for the poor performance of this M&A include: Pushing up the M&A premium on the grounds of performance commitment has buried the hidden danger of goodwill impairment;Premium M&A and related M&A simultaneously increase the risk of principal-agent problem;Shareholders whose interests have been encroached on take countermeasures to cause disputes,which affects the operation and growth of the company;Investors are skeptical about the real M&A motivation of Xunyou Technology,which directly affects the corporate reputation.Accordingly,this paper puts forward some suggestions for other companies: when the valuation of M&A exceeds the theoretical valuation,they should be more cautious;Avoid raising M&A prices due to high performance commitments;Avoid using more than two ways of high-risk M&A at the same time;When the M&A premium is high,there should be a hedging design.This paper draws the following conclusions: First,M&A plays a role in improving performance;Second,performance commitment has adverse effects on the long-term M&A performance;Third,unreasonable M&A methods will reduce M&A performance.