Research On The Risk Control During Acquisition Of Internet Companies

In recent years,the market pattern of our country has changed rapidly and the economy is growing rapidly.The Internet enterprises have experiencing a merger boom.It is not just the Internet start-ups who need to rely on mergers and acquisitions to get asylum,the Internet giant BAT,like Alibaba,Tencent and Baidu,also take M&A as an important means of its all-round development.M&A has become an important way for Internet companies to improve its comprehensive strength.However,not all mergers and acquisitions can achieve the target goal,for M&A is bound to bring risks.The common types of risk for the Internet company mergers and acquisitions include competition risk,business risk,strategic risk and human resource integration risk and others.Different acquisition risks may bring different economic consequences.Therefore,the enterprise must fully recognize the merger risk,and taking it under its control,as well as try to show the synergy effect between the two companies and explore new profit growth point after the merger is completed.Only in this way,can the companies minimize the merger risk and promote the enterprise development.Compared to traditional enterprises,the M&A in the Internet industry has the characteristics of more frequent acquisitions,greater span in different industries,more emphasis on the potential value of the target industry and on market share compared to short-term economic benefits.According to these characteristics,based on analyzing the Internet enterprise merger risk identification and control methods,this paper takes the merger of AutoNavi with Alibaba as an example,and analyzes its acquisition motivation and risk identification in the merger process,then sums up the measures to deal with risk and finally analyzes the control effect of acquisition risk through the implementation of merger.Through theoretical analysis and case study,the paper draws the following conclusions:(1)the merger of AutoNavi with Alibaba makes positive financial effect,.It realizes the periodical business improvement and achieves the integration of Internet business,mobile phone business and automotive business.(2)The acquisition has promoted the Alibaba’s market share to a certain extent and achieves customer turnover increase.(3)It saves time and cost since the merger changes many external transactions into the internal transaction.(4)AutoNavi improves the business model of Alibaba,which forms an industrial chain,"financial-online payment-Internet-Map-offline business".Based on the case study of merger and acquisition of AutoNavi with Alibaba,this paper puts forward the following suggestions about Internet enterprise merger risk control: firstly,companies should try to take the strategic risk weakening method for risk prevention and work well on the pre-merger risk prevention;Secondly,companies should accelerate the acquisition process and maintain the basic business development and never ignore the competition risk during mergers and acquisitions;Thirdly,companies should attaches great importance to business and human resources integration in the post-merger period and the stuff transferring should coordinate with business integration.