Research On Financial Risks Of Internet Enterprise Mergers And Acquisitions

Today,with the rapid development of the Internet empowered by 5G technology,the number of Internet companies has soared and the competition has become more and more fierce.According to the data in the 50 th "Statistical Report on the Development of China’s Internet Network" released by the China Internet Network Information Center(CNNIC),the size of China’s Internet users reached 1.051 billion,and according to the latest census and data,the Chinese population is 1.41 billion,of which the elderly over15 years old and under 65 years old total 970 million,from these two sets of data,it is not difficult to see that China’s Internet user incremental space has been insufficient,and the development of Internet enterprises has also entered the era of "competing for stock" with high customer acquisition costs.In this stage of Internet economic integration and development,acquiring key elements such as user pools,business data,and technical talents of other enterprises through mergers and acquisitions has become one of the important ways for Internet enterprises to improve their business territory and improve their competitiveness and market share.Although mergers and acquisitions are considered to be powerful tools for creating value,they are not without costs,in the mergers and acquisitions of Internet enterprises,whether it is the initial valuation link,or the financing payment link in the process,the integration link after the merger and acquisition,there are various hidden risks,which link has a problem may cause the failure of the merger and acquisition,restricting the development of the enterprise.Therefore,it is of practical significance to study the financial risks of M&A of Internet enterprises and propose corresponding risk avoidance strategies to improve the success rate of M&A of Internet enterprises.After reviewing the excellent literature at home and abroad,this paper finds that the research on enterprise mergers and acquisitions is mainly based on traditional enterprises,with M&A performance and enterprise value evaluation as the main direction,and there is less research on the financial risks of Internet mergers and acquisitions,and because there are not many typical cases of Internet mergers and acquisitions,researchers mainly focus on old cases in the selectio n of cases,and the degree of case novelty is low.By explaining the concepts and theories related to mergers and acquisitions of Internet enterprises,this paper selects the relatively novel case of Baidu’s acquisition of YY live broadcast,identifies the financial risks of the merger and acquisition based on the actual situation,and uses the Amante Z-score model to conduct a comprehensive financial risk analysis of Baidu’s acquisition of YY live broadcast,and finally proposes specific risk control strategies according to the existing risks.It is found that Internet enterprises have different financial risks in the early,middle and late stages of M&A,with pre-M&A risks mainly reflected in valuation risks,risks in the M&A process mainly reflected in financing payment risks,and post-M&A risks mainly reflected in integration risks.Finally,this paper proposes a series of improvement measures for the existing risks,hoping to provide useful reference for the M&A activities of similar enterprises in China.