Research On M&A Valuation Of Pharmaceutical Enterprises In China

The merger and reorganization of enterprises is to allocate resources through market-oriented means.Whether it is an external investor,internal manager or other stakeholders,the valuation of M&A companies is very important and the focus of the game among all parties.At present,there are more researches on M&A valuation by domestic and foreign scholars,but most of them focus on the theoretical research of M&A valuation from a single perspective,and few empirical studies combined with industry characteristics.Therefore,this paper combines the characteristics of risk and return of pharmaceutical industry,and conducts empirical test on the innovation model and argument proposed in the paper from the theoretical and empirical research levels,and increases the research on the valuation theory and integration application of domestic pharmaceutical industry M&A.First,in view of the risk return characteristics of the pharmaceutical industry,based on the in-depth analysis of the motives,logic and problems of the M&A in the pharmaceutical industry,aiming at the problems of the current valuation of M&A,the valuation bubble and the loopholes in the compensation mechanism,the factor regression equation affecting the valuation of M&A is constructed.Thus,the influence factors are used as the weight parameters to set the value of synergy effect.Based on the influence factors,the collaborative effect value model is constructed by combining neural network algorithm to measure the value of synergy effect after M&A,and then adjust the initial M&A valuation by comparing with the valuation interval.Secondly,from the perspective of business model and enterprise life cycle,according to the statistics of patent protection period and failure rate of new drug R&D,this paper analyzes the risk and income characteristics of R&D investment in pharmaceutical industry and centralized procurement policy,and puts forward the valuation model of patent medicine,generic medicine and pipeline in progress.From the perspective of asset evaluation and game compensation mechanism,the paper compares and analyzes the current asset cost method,market method and income method,especially the future income forecast part of income method,and puts forward the applicability of two-stage model in M & a valuation of medical enterprises combining with the enterprise life cycle and industry policy.Based on the integration of the above-mentioned valuation methods,combining the particularity of the business model and the valuation adjustment mechanism of the pharmaceutical industry,the adjustable model of the valuation interval is designed based on the constraint conditions of the cooperative effect value and actual performance,so as to solve the difficult problems encountered in the M & A of the pharmaceutical industry,and thus correct and deal with the disputes of the negotiation game between the two parties,It can promote the interest consistency of both sides of M&A,better promote the industrial integration after M&A,and promote the synergy effect and the value of the enterprise.Finally,through the construction of incomplete information dynamic game matrix,the game equilibrium of the interest driven behavior and valuation strategy of all parties in M&A valuation of pharmaceutical enterprises is analyzed in depth,and the valuation of M&A is promoted from the practical operation level to the academic research level.Through the case data of A-share pharmaceutical companies and the matrix analysis of mixed equilibrium game,the innovation and effectiveness of the empirical interval model can be obtained,the theoretical connotation of the intrinsic value of the enterprise can be understood more deeply,and the research methods of M & a valuation of pharmaceutical industry can be enriched and improved.The conclusion of this paper shows that in the process of M&A transaction game,the game equilibrium between the two parties can be realized by constructing the valuation interval model which integrates multiple valuation theories,and setting the synergy effect value and actual performance as the dynamic constraint conditions of the final valuation.In the empirical study,through the effective samples from the merger data of A-share pharmaceutical listed companies in 2013-2019,the difference between the actual execution price of the subject matter and the calculated price of the valuation interval model is analyzed.Under the condition of mixed equilibrium,the interest consistency between the two parties can be positively encouraged to reduce the Arbitrage Behavior with high expected overvalue in the process of merger and acquisition,So the valuation interval model can promote the conclusion of M&A negotiations to achieve game equilibrium.The research results of this paper have certain application value to the practice of M&A and reorganization of Chinese pharmaceutical enterprises,which provides some reference value for the CSRC to the supervision and regulation design of the merger and reorganization of listed companies,and puts forward a relatively neutral valuation model to promote the achievement of M&A transactions in the valuation game,Therefore,it has certain social practical value and economic effect to promote the sustainable and healthy development of the environment of M&A in China’s financial market.