The Research On Mergers And Acquisitions Effects Of Chinese Pharmaceutical Industry Listed Companies

In recent years, China’s aging population issues have highlighted, medical insurance system has being improved constantly, national income level has kept improving and Governments introduced policies to support the pharmaceutical industry. Chinese pharmaceutical industry has made great progress, and has been maintained strong growth momentum. But there are still many problems in Chinese pharmaceutical industry compared with the pharmaceutical industry of developed countries.M&A can be able to promote the pharmaceutical industry to restructuring and upgrading,and will become the only way to keep sustainable and healthy development of China’s pharmaceutical industry in the next few years. However, in addition to the complexity of M&A activity, the Chinese capital market is faultiness, relevant laws and regulations are not perfect, the operation of M&A is not standardized, government intervenes M&A excessively.All of the factors make China’s M&A activities have great uncertainty.whether the Chinese pharmaceutical enterprises through M&A make business performance improved, yet we went to verified.Based on the research of domestic and international M&A performance, In this paper, Chinese pharmaceutical listed companies occurred M&A between2008and2009have being chosen to be research samples. In accordance with certain principles, screened47samples from the merger event. In the47samples,there are28horizontal merger samples,10vertical merger samples and9conglomerate merger samples.To study the impact of M&A performance of acquiring party and the effects of different types of M&A on company performance,the research method is based on accounting research method to construct comprehensive score model binding factor analysis.The final results of the empirical analysis showed that:Overall, after a post-merger integration, Chinese pharmaceutical industry listed companies’ operating performance have been improved.From the perspective of different types of M&A,during the study period,horizontal merger and conglomerate merger of Chinese pharmaceutical industry listed companies were relatively successful, vertical mergers did not achieve the desired results. The formation process of new industry-specific management capabilities in conglomerate merger makes performance lack of stability.Therefore, the paper argues that horizontal merger may be the optimum choice for Chinese pharmaceutical industry listed companies.According to the conclusions of the empirical analysis, combined with the development of China’s pharmaceutical industry status quo and the external environment,the paper put forward five suggestions aiming to improve the performance of Chinese pharmaceutical industry listed companies:First,clearing the direction of M&A,reducing the risk of vertical mergers and conglomerate merger;Secondly,correcting merger motives from the pursuit of long-term interests; Thirdly, Government recognizes the position in M&A activity, avoiding excessive interference behavior of mergers and acquisitions; Fourth, After the M&A, the company’s target focus on integration;Fifthly,improving the acquisition-related legal system and strengthening supervision and punishment.