Research On Post-merger Integration Risk And Prevention Of Chinese Internet Enterprises

Chinese Internet enterprises have been constantly growing and expanding during their more than ten years'development. These larger enterprises include Sina, Sohu, Netease, which as the representation of the portals; Alibaba, Mde-in-China.com, which as the representation of the e-commerce service provider; Shanda, Baidu, Tencent, which as the representation of the online service provider. Since the first case of a merger happened in Chinese Internet industry in 1998, the Internet enterprises constantly expand through mergers and acquisitions. Internet enterprises are in the transition period from start-up phase to large-scale phase, and they will develop to over-accumulation phase. They need to integrate different resources, such as business, staff, culture, technology and so on, which the enterprises acquire through M & A. Because Chinese internet enterprises are in a fast-changing environment, they will face with bigger risks than traditional industry. How to identify these risks of integration and prevent them effectively, in order to improve integration efficiency an increase success possibility are the problems that Chinese internet enterprises faced.Chinese internet enterprises take on some characteristics during their M & A, these characteristics include the number of transnational M & A is small, potential value of target enterprises is large, most Chinese internet enterprise select overseas listing, competition of M & A is intense, turnover rate of staff is high, M & A tends to diversity, involves in traditional industry. These M & A characteristics make Chinese internet enterprises need to deal with more difficulties than traditional enterprises in the process of integration.In order to improve strategic development, Chinese internet enterprises launch a series of M & A, such as related M & A, which is benefit for their competition and technology advantage. These risks which are Chinese internet enterprises faced include strategic integration risks, cultural integration risks, team integration risks, business integration risks, technology integration risks and customer integration risks. Risks exist in every aspect of the whole stage.As for as the risks defended, Chinese Internet enterprises need to take prevention principles and process as support. The principles of risk prevention involve in combining the urgency and importance; combining short-term and long-term risk prevention; systematic risk prevention; rapid integration. Risk prevention process needs to be prepared from the pre-merger.This paper not only adds new content of theory of the Internet, but also adds new insights for the theory of the post-merger integration. Risk in post-merger integration study of this paper provides some theoretical guidance for these companies' integration in risk identification and how to prevention.