A Tudy On Financial Risk Control Of M&A Of Internet Companies

With the rapid development of China’s economy and the introduction of the "Internet+" concept,China’s Internet industry has begun to show its tremendous economic vitality,and various Internet companies are emerging at a rapid pace.In order to capture new markets faster,most internet companies choose to expand their scale through mergers and acquisitions.However,the success rate of M&A activities is not high,as various risks are involved in the entire M&A activity,and there are many cases of M&A failure due to M&A financial risks.In addition,the Internet industry is fast growing,with strong liquidity and high risk,and there are more uncertainties than in traditional industries,so it is important to strengthen the study of financial risk control of M&A in China’s Internet companies.As one of the giant companies in China’s Internet industry,Company B has accelerated the pace of foreign investment in recent years,and Company B wants to expand its business scope,build a complete industrial chain and create its own corporate mobile ecosystem through foreign investment and M&A.On 17 November2020,Company B wholly acquired the Y Live platform under the Huanju Group for US$3.6 billion,and this M&A activity is an important step for Company B in opening up a new ecology in the live broadcasting industry.The acquisition was a major step forward in opening up a new ecology in the live streaming industry.Due to the huge amount of the transaction,the case is of some reference value for studying the financial risk control involved in M&A of internet companies.After the introductory section,this paper introduces the concepts and theoretical foundations related to Internet enterprises and their financial risks,followed by the current situation of M&A in China’s Internet industry,and then introduces the case of Company B’s M&A of Y Live Streaming Platform.Finally,based on the insights and experience gained from the analysis of Company B’s financial risk control,the paper summarises and makes additional suggestions for the control of financial risks in the M&A process of internet companies.In summary,this paper draws the following conclusions: firstly,Internet companies should maintain a prudent attitude towards M&A activities and choose their M&A targets rationally;secondly,Internet companies should pay attention to the financial risks that arise at various stages of the M&A process,especially the financial risks of post-merger integration,and should make good financial risk control deployment and planning at various stages of the M&A process;finally,Internet companies should develop financial risk control plans according to their own corporate realities to reduce the risk of M&A.Finally,Internet companies should develop financial risk control plans according to their own corporate realities to reduce uncertainties and potential negative impacts brought by M&A transactions.