Study On Goodwill Of M&A In Information Technology Industry

Since the 21 st century,Chinese enterprises have shown more and more strength in cross-border mergers and acquisitions.The number and scale of cross-border mergers and acquisitions are getting larger and larger,followed by higher and higher total goodwill and huge impairment of goodwill in the A-share market.The sharp rise of goodwill impairment has turned goodwill,which originally symbolized promising future,into an “untimely bomb” that investors hate.The large amount of goodwill is a common feature of companies in asset-light industries such as information technology industry.Most of the existing case studies in the field of goodwill are the merger and acquisition cases of companies with large amount of goodwill impairment or performance commitment.This study selects the case of HNA Technology’s acquisition of Ingram Micro International without a performance promise,and the huge amount of goodwill has never been impaired,which is typical and different in the selection of cases.It evaluates the fairness of its valuation by analyzing the financial indicators of the acquired company Ingram Micro in the five years before the acquisition,and then analyzing the financial performance of HNA Technology in the five years after the acquisition to verify the accuracy of its non-provision of goodwill impairment.In an attempt to verify that in the process of mergers and acquisitions,the valuation of the target company Ingram Micro was too high,and after the merger,HNA Technology’s performance decline should be provided for goodwill impairment.This paper takes the case of HNA technology’s merger and acquisition of IMI as the analysis object.Based on the domestic and foreign literature,this paper uses the literature research method and case study method to study the goodwill formed when HNA technology merged with IMI.The results show that the goodwill of HNA technology has shown signs of impairment.As goodwill accounts for nearly 90% of net assets,HNA Technology has postponed the provision of goodwill impairment due to concerns about net assets becoming negative.If we want to avoid this kind of risk from the source,we should fully consider the synergy effect when making M&A decisions.In view of the high goodwill and its potential impairment risk,this paper puts forward some relevant suggestions,such as the relevant departments help accounting practitioners master the goodwill impairment test methods,strengthen the supervision of high premium M&A and goodwill impairment,and fully consider whether the synergy effect can be produced before M&A.It is expected to play a reference role in future M&A decisions of companies and investment decisions of small and medium-sized shareholders effect.