Research On Tencent’s Motives And Performance Of Cross-border M&A Of Supercell

In the context of global economic integration,many enterprises are actively promoting international development strategies to achieve the goals of global enterprises.However,cross-border mergers and acquisitions are an important way to rapidly achieve global development.Transnational mergers and acquisitions can promote enterprises to expand foreign businesses,promote enterprise internationalization,change the company’s business structure,reduce competitive losses,promote technological upgrading,and enhance the strength of the company.However,due to cultural differences,institutional differences,or other factors in international transactions,cross-border mergers and acquisitions have failed,and even dragged down corporate bankruptcy.Therefore,we should strengthen the research on the performance of mergers and acquisitions in order to draw lessons from it,so as to provide corresponding reference and experience for Chinese enterprises in the process and responding to risks.In recent years,the domestic game industry has made rapid progress,and the domestic game market has become the largest game market in the world.However,due to various reasons,the domestic game market has been growing steadily,but its development speed is becoming slower and slower.And with the development of technology,various new types of electronic mobile devices are emerging in an endless stream.Players’ requirements for the quality of games are becoming increasingly high,and game products are becoming increasingly diverse.This has led to the development of the quality and diversification of the game industry.All these changes have prompted many game companies to make strategic changes.At the same time,in order to promote the global development strategy,accelerate the development of foreign markets,introduce high-quality talent teams,high-quality products,improve their own product development,technical support,and other professional levels,it is even more necessary to use overseas mergers and acquisitions to break through various limitations and constraints.Therefore,increasing the intensity of mergers and acquisitions of foreign game companies is an inevitable trend in the current development of the game industry,which is of great significance for promoting the development of the domestic game industry and enhancing the international competitiveness of domestic game companies.Tencent is a relatively successful gaming company in China,and its overseas M&A activities are also an important factor in its further growth and sustained growth.After acquiring game companies such as Epic Games and Riot Games,Tencent has established its leading position in the world’s computer client game market.In order to achieve the same outstanding results in the field of mobile games such as mobile phones,Tencent invested a huge amount of US $8.6 billion in 2016,acquiring 84.3% of the shares of Finland’s most successful mobile game development company,stepping into the overseas market and obtaining high-quality products and talents.This acquisition has set a record for Tencent’s acquisition in the gaming industry,and is also the largest business in recent years.Therefore,the research and analysis of typical cases of Tencent’s acquisition of Supercell provides useful reference and experience for other game companies’ overseas mergers and acquisitions.Tencent spent $8.6 billion on the acquisition of Supercell,which has a significant impact in China and even the global gaming industry.Therefore,this paper conducts a research and analysis of this cross-border acquisition,and briefly analyzes the motivations for Tencent’s acquisition of Supercell in combination with relevant cross-border acquisition theories.At the same time,it uses event research,financial indicator evaluation,and EVA evaluation methods to conduct research and analysis on the performance of this acquisition from multiple aspects.Through the study of this merger and acquisition case,it is found that Tencent’s cross-border merger and acquisition of Supercell has been successful.From the short-term performance analysis based on the event research method,the long-term performance analysis based on the financial indicator analysis method and the EVA evaluation method,it can be concluded that this merger and acquisition event has brought positive benefits and value to Tencent.Based on a summary of cases,this article proposes four relevant experiences for gaming companies to better enhance their market competitiveness and achieve global strategic expansion through cross-border mergers and acquisitions: 1.The motivation for mergers and acquisitions conforms to corporate development strategies;2.Choose acquisition targets carefully;3.Reasonable selection of merger and acquisition methods;4.Focus on resource integration after mergers and acquisitions.