Research On The Motivation And Performance Evaluation Of Alibaba’s M&A Of Ele.me

In April 2018,Alibaba teamed up with Ant Financial to announce the completion of a wholly-owned cash acquisition of Ele.me for US $ 9.5 billion.Since May 2018,Ele.me would be inclouded in the scope of Alibaba ’s consolidated statements.This M&A is the largest transaction in the Chinese M&A market in 2018 and the largest allcash transaction in the history of the Chinese Internet industry.The analysis and evaluation of this M&A case and the conclusion of experience have certain significance for the specific practice of future corporate M&A.This article analyzes the motivation of Alibaba’s M & A from three dimensions: strategy,management and economy.Then the artical analyzes the performance of M&A from internal and external perspectives by establishing a performance evaluation system that is driven by motivation realization and selecting appropriate M&A performance evaluation indicators.Finally,this article uses the EVA model evaluating the overall performance of mergers and acquisitions.Research shows that firstly,the aim of Alibaba’s M&A of Ele.me is to develop new markets strategically,adapt to future market development trends and consolidate the core business market,and ultimately increase corporate value.Secondly,the aim is to gain management synergy in operations to accelerate Alibaba ’s Digital operation process.Thirdly,the aim is to reduce the cost of building a local distribution system.Besinds,M&A is also an inevitable choice for Alibaba to fight against Tencent ’s local service segment.After research,it was found that this M&A in the short term has brought huge traffic growth to Alibaba,showing an amazing income growth rate.But the profitability is not ideal,which is mainly due to the high cost of the local life service sector and the integration post merger,which has dragged down the operational efficiency.In the long run,this M&A has made a significant contribution to the promotion of the new retail strategy and the construction of Alibaba ’s digital economy,while it has laid the foundation for the full digitalization of Alibaba ’s operations,helping the comprehensive upgrade of the operational efficiency brought by digital operations.Overall,Alibaba’s M&A of Ele.me have promoted the increase of enterprise value with certain lag.The long-term motivation of this acquisition has been realized.