Analysis of Corporate Mergers and Acquisitions: Evidence from Baidu's Acquisition of YY Live

Abstract

Contemporarily, the live streaming business has experienced exponential growth and appeal. After recognizing the enormous potential of the live streaming sector, Baidu pursued the strategic acquisition of YY Live. This article analyzes the case of Baidu’s merger and acquisition of YY live. First of all, it introduces the related research and theory about the financial performance before and after acquisition. Then, we choose Baidu with its acquisition of YY live. To be specific, this study introduces the merger and acquisition process in a brief way, using event research method and financial index method to analyze the motivation of Baidu merger and acquisition of YY live and Baidu’s corporate financial performance change after the implementation of merger and acquisition strategy. It is found that the acquisition behavior has improved the profitability of the company, has no obvious impact on the solvency, has a negative impact on the operating ability and improves the development ability. Finally, we draw the conclusion, and put forward corresponding suggestions for enterprise merger and acquisition. These results have certain reference value and guiding significance for researchers in live broadcasting industry and enterprise acquisition.