Case Analysis of Tencent’s Cross-Border Merger and Acquisition of Sumo Group

Abstract

As the process of global economic integration continues to accelerate, more and more companies are beginning to implement global development strategies, and cross-border M&A are an important way to achieve it. This paper takes Tencent's cross-border M&A of Sumo Group as an example. It first introduces the two parties and the process of the M&A, then analyzes the motivations of the M&A from multiple aspects, and uses the event study method and financial indicator method to analyze the performance of the M&A. The research results show that the final value of the cumulative excess rate of return in the ten trading days before and after the M&A date on July 19, 2021 is positive, and multiple financial indicators have performed well in the long term, indicating that Tencent has achieved positive market performance and financial performance after the M&A. Based on the analysis and conclusion, this paper enriches the literature on cross-border M&A in the game industry, and also has certain implications for cross-border M&A of other game companies.