HD Pharmaceutical Enterprise M&A Synergy Effect Research

With the gradual improvement of the capital market and gradually accelerated process of economic integration, Merger and Acquisition(hereinafter referred to as M&A) has become a main way for enterprises to expand business and enhance their strength by achieving the concentration of production and capital. Compared to other countries, M&A in our country started later, but develops faster and spreads much wider. M&A brings a certain amount of risk when offering opportunities for Chinese enterprises. In China, there are many examples of failure in M&A. The key to successfully achieve M&A lies in synergy achievement. How to understand the synergy, identify collaborative elements and improve synergy are theoretical and practical issues of great importance to our M & A activities.The pharmaceutical industry has been playing a very important role in Chinese overall economy. It is one of the fastest growing industries, which closely relates to our people’s livelihood and grasps the lifeline of our economy. In recent years, the frequency of M&A happening among pharmaceutical companies has significantly increased. The introduction of the New Deal in pharmaceutical industry forces the contained roles to cooperate with each other by integrating resources and expanding business scale to achieve a satisfactory acquisition performance. Under this circumstance, combining theory and case studies, this paper selects HD pharmaceutical enterprise, a leading enterprise in the pharmaceutical industry, as a case study.Firstly, the paper illustrates the background and significance of this topic, and systematically reviews and summarizes the domestic and international researching achievements of M&A. Then it demonstrates the definition and classification of M&A and synergy. Regarding HD’s M&A as the case object, it briefly introduces the current status of M&A, and specifically analyzes the implementation of M&A synergy from three aspects of management synergies, operating synergies and financial synergies. Finally, on the basis of in-depth analysis, it sums out the problems existing in this M&A and the reasons why they exist, and later on comes up some recommendations to improve acquisition performance, namely, pre-merger synergy assessment, reasonable determination of the acquisition premium, strengthened integration of resources after M&A; careful choose of payment mode, and optimizing of the capital structure after M&A. These measures aim to provide some ideas for future M&A among enterprises, which can play a role in enlightening more successful cases in M&A. Actually, the innovating points of this paper lie in: first, when analyzing the implementation achievement of M&A synergy, it does not directly come to a conclusion of whether the merger synergy gained or not, but analyze from three aspects of management realization synergy operation realization synergy and financial synergy in detail to conclude which parts have realized synergy and which parts have not, which can help enterprises to considering more effective measures to gain a specific positive synergy. Second, it proposes the concept of deferred payment to improve M&A synergy, and also lists some matters that need attention when arranging deferred payment against the HD case.