Case Analysis Of M&A Operations Between Chinese Media Corporation And Wisdom Star Corporation

In the past 2 years,China has successively promulgated a series of favorable cultural policy,to promote the cultural industry transformation and upgrading.Under the background of Internet,by way of mergers and acquisitions,It'll expand its traditional business to the emerging Internet industry.Wisdom star company as a good development of Internet game industry,Chinese media company acquiring the company has synergistic advantages of media industry and the Internet.Through the study of previous scholars on mergers and acquisitions,this article launches the analysis according to "motivation-risk-Performance".Firstly,the development strategy of Chinese media to clarify its future layout of globalization,to introduce international quality publishing resources;It forms a favorable online and offline mode through China media content resources,the next line of channels and Wisdom star's internet platform business favorable the line;and Wisdom star can provide self-drive game products and R & D strength for China media companies to avoid technical barriers when it enters the game industry.In the three periods before,after and after the M & A,the merger risk facing the two sides are analyzed: the Valuation risk caused by asymmetric information;liquidity risk caused by the payment methods;Compensation risks arising from gambling agreements and impairment tests.Finally,the comprehensive evaluation of the merger of short and long term weighs whether it has achieved its desired results.Short term performance using the event study method,it analyzes the daily excess return and cumulative abnormal return of Chinese media companies before and after mergers and acquisitions,and finds that mergers and acquisitions in the short run have made Chinese media firms gain higher income rates than the market average;long-term performance by using the factor analysis method,a comprehensive score model of 33 cultural media sample firms was constructed,and the overall value enhancement of Chinese media companies was judged according to the industry scores and rankings before and after the merger.Through different period performance evaluation,it is found that the acquisition behavior has achieved the desired purpose.