Study On The Overseas M&A Performance Analysis And Strategic Transformation Of Internet Corporation

In recent years,the Internet has developed rapidly.In 2011,the Sixth Plenary Session of the 17 th CPC Central Committee put forward: “Encourage powerful cultural enterprises to promote cross-regional,cross-industry,and cross-ownership mergers and reorganizations.” In March 2015,Premier Li Keqiang stated in his government work report.The concept of "Internet Plus" to deepen the future development of the Internet industry means that "Internet Plus" has become an important part of the national strategy.Under the influence of internal and external factors intensifying the policy environment and intensifying external competition,many traditional media companies are actively looking for reform and transformation.Mergers and acquisitions are one of the important ways to achieve rapid enterprise development and transformation.The mergers and acquisitions in Internet industry have many risks such as blind mergers and acquisitions,valuation errors,and failure to integrate resources.In order to further study the actual performance of the impact of Internet M&A,the case chosen in this paper is the largest M&A event in the gaming industry by Internet industry giant——Tencent: Tencent's acquisition of Supercell with US$8.6 billion in order to implement its strategy of diversification and synergy.This paper adopts a case analysis approach to analyze the impact of short-term performance by using the event research method,analyze mid-term performance by using the stock price change method,analyze the impact of long-term financial performance by using the financial indicator analysis method and market data,and consult the Tencent Quarterly News and related information to research Tencent's strategic transformation.The study found that Tencent's strategic transformation has gone through four stages: Non-gaming to Companies-game,Companies-game to Companies-internet,Companies-internet to International companies-internet giants.At the operational level,it transform from a transition to multiple closed loops.This paper believes that “Cash + Flow and Service” is an important reason for Tencent's success.After the traffic channel(WeChat)and Internet eco-environment' construction(continuous mergers and acquisitions),this case is a major quantitative M&A for the deep-pumping of the gaming industry to obtain cash flow,overseas markets,and synergy effects,which is the result of qualitative changes in gradual,sequential M&As.The study found that the short-term performance of mergers and acquisitions was normal,and the capital market was not optimistic.In the medium term,Tobin's Q value increased,which means the plus of shareholder value;from the long-term financial performance,debt repayment and operating capacity don't perform well,but later Tencent adjusted quickly.Moreover,The ability and quality of profitability decreased but the growth capacity has rebounded.From the perspective of long-term market performance,this acquisition has opened up overseas markets and found new revenue growth points,resulting in a better synergy,but Supercell revenue and profits began to decline since the merger,which means that There is a bubble in corporate valuation and there is pressure on Tencent's next strategic transformation of cash flow.