A Research On Assessment Methods Of Mergers And Acquisitions In Pharmaceutical Industry

With accelerating development of mergers and acquisitions, a reasonable valuation ofthe enterprise is increasingly becoming an urgent need of the market. Currently, more andmore mergers and accurate valuation of the target company determines the success orfailure of the transaction and acquisitions are priced with reference to the assessmentresults. Moreover, from a very large extent, if it cannot assess objectively, interests of bothsides will be hurt. However, in order to make a reasonable and fair valuation, theassessment methodology to choose has attracted too much attention of the various parties.There are two reasons to choose pharmaceutical industry: On the one hand, with thepush of China’s health care reform, the mergers and acquisitions are booming and sopeople begin to pay more and more attention to value assessment; on the other, it is acombination of traditional and modern industry so that there are diverse requirements ofassessment methods. All this shows that the assessment of the pharmaceutical industry isrepresentative and in great demand. This paper takes158mergers and acquisitions ofpharmaceutical companies in SSE and SZSE between January1,2006and December31,2011as a sample to analyze these assessment methods by the use of qualitative methodsand quantitative methods. Firstly, qualitative methods are used to describe the literaturesand the theoretical basis of valuation method and the state and problems of pharmaceuticalindustry; Secondly, analyze the data by statistical analysis and main factors to affect theassessment methods,(namely evaluation purposes, the type of the value and the associatedtransactions), as well as and the relationship between assessment methods and theappraised appreciation rate; Then, a brief analysis of the typical case. Finally, summarizethe state and problems of assessment methods at present and gives some policyrecommendations.