| With the development of science and technology and the concept of the "Internet+",all industries of society are developing rapidly,and as an indispensable part,Internet companies are gaining momentum.In order to seek breakthroughs,Internet companies are gradually focusing on mergers and acquisitions.Alibaba acquired NetEase Kaola in 2019 for a hefty price of US$2 billion,but it is crucial to identify potential financial risks in the M&A process and take effective preventive measures in time.This paper takes Alibaba’s merger and acquisition of NetEase Kaola as a case to explore the different types of financial risks faced by internet companies in the M&A process combined with theory of M&A financial risk.Based on historical research literature and relevant theory,this article explores the specific circumstances,the background,motivation and overall process of the M&A transaction,identifies and analyzes the pricing risk,financing and payment risk,integration risk faced by the pre-,mid-and post-merger phases.The hierarchical analysis and fuzzy integrated evaluation methods are used to construct an evaluation model to quantitatively assess the overall financial risk,and the four types of risk were reasonably divided into twelve factors to measure their respective degrees of influence.Research findings:the pricing risk at the pre-merger stage and the integration risk at the post-merger stage were significant,with the pricing risk mainly reflected in the choice of valuation method and the value potential risk,while the subsequent integration risk was greatly influenced by the business integration and management system integration.Based on the evaluation results,preventive measures are proposed for the pre-,mid-and post-merger stages respectively.Making comprehensive survey and valuing the business in relation to its characteristics in the pre-acquisition stage.Optimizing financing options,rationalizing payment methods and observing exchange rate fluctuations in the mid-acquisition stage.Paying attention to the differences,improving financial systems and management system in post-merger stages.The research in this paper has certain practical implications for the control of risks in the implementation of M&A by internet companies.From the respective of combining qualitative and quantitative,expands ideas for them to use more scientific and reasonable risk analysis and evaluation methods,and provides guidance for the implementation of relevant preventive measures. |
