Case Study Of Target Enterprise Valuation In The Merger And Acquisition Of M Pharmaceutical Company

With China's economy stepping into the new normal and structural reform of the supply front,the government begins to promote the mixed ownership of the state-owned enterprises,which breeds a large number of mergers and acquisitions transactions.Consequently,China has entered an era of mergers and acquisitions among enterprises.However,not all mergers and acquisitions are successful.Companies in China have not yet accumulated enough experience and methodology in mergers and acquisitions.As an emerging market,China lacks of the experience and methods in mergers and acquisitions,so the mergers and acquisitions in China are of greater complexity.As an important part of enterprise merger and acquisition,it is that whether target valuation is reasonable or not,directly determines the success or failure of mergers and acquisitions.It is more complex for China's pharmaceutical enterprises,such emerging industry,to make reasonable valuation of the target enterprises in mergers and acquisitions industry,because of its particularity.It is an urgent problem need to be solved,that how to make reasonable valuation of target enterprise in mergers and acquisitions of the pharmaceutical industry.In this paper,through the case study on the valuation of target companies in M pharmaceutical merger and acquisition,the appropriate methods to make reasonable valuation of target enterprises in the merger and acquisition process was discussed.Using the method of literature review and case analysis and combing the theory and practice,a complete evaluation scheme and process was put forward,which takes the characteristics of pharmaceutical industry into consideration.The research results enrich the value valuation system in merger and acquisition process of pharmaceutical enterprises,which is of important theoretical and practical significance.The research idea of this paper is as follows: firstly,by summarizing the domestic and foreign merger and acquisition valuation literature,get the result that the current enterprise merger and acquisition target enterprise valuation process should not focus on creating a new theory and method,but how to improve and perfect the existing evaluation methods,to apply theory to practical practice and improve the accuracy of evaluation results;secondly,this paper analyzes the M acquisition of D pharmaceutical case.Through the analysis of the background of the pharmaceutical industry and the enterprises,the motivation of mergers and acquisitions,and the expected effect after the merger,an appropriate evaluation method for target enterprise in the merger and acquisition between M pharmaceutical company and D pharmaceutical company was put forward,which takes the characteristics of pharmaceutical industry into consideration with the integration of theory and practice.It is proved that income method is the most appropriate method for the evaluation of target enterprise in mergers and acquisitions of pharmaceutical enterprises at present stage,while market method can be used to verify the result of income method.