When Strategic Synergy Fails: A Case Study of Alibaba’s Exit from Sun Art Acquisition

Di Fu

doi:10.54097/ga1hhq75

Authors

Di Fu

DOI:

https://doi.org/10.54097/ga1hhq75

Keywords:

Alibaba; Sun Art Retail; mergers and acquisitions; integration.

Abstract

This paper is based on the case of Alibaba's acquisition of Sun Art Retail to explore the deep-seated reasons for its strategic synergy failure. The paper systematically sorts out Alibaba's M&A motivations, integration paths, and obstacles in the execution process by analysing M&A theory and strategic synergy theory. Alibaba has invested heavily in technology empowerment and organisational structure adjustment. However, problems such as management overlap, cultural conflicts, and inconsistent system logic have emerged during its integration process. This has led to the failure to achieve synergy and a continuous decline in business performance. In the end, Alibaba chose to sell all its shares by the end of 2024. This marks a major adjustment in the new retail strategy. The paper believes that synergy in cross-industry mergers and acquisitions needs to be achieved through multi-dimensional means such as structural design, cultural integration, and performance monitoring. This case provides important lessons and strategic suggestions for platform-based companies to promote online and offline integration and cross-border integration in the future.

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