Research On The Deterioration Of Continuous M&a Performance On Walvax Biotechnology

As one of the emerging industries of strategic importance in the 21st century,China’s biopharmaceutical industry has the characteristics of small scale,low concentration,and weak R&D capability.Compared with other industries,the biopharmaceutical industry has stricter entry conditions and the features of high-tech,high-input,high-risk,high-yield and long-term.In order to enhance competitiveness,R&D capability,many companies in the biopharmaceutical industry start Mergers and Acquisitions(hereinafter referred to as M&A).This paper selects the continuous M&A of Walvax Biotechnology as a research object.First,the motivation and basis of the Walvax is explored.Second,after analyzing the M&A behavior with the M&A capabilities model,it finds that the Walvax lacks of reasonable plan before the M&A;the payment method during M&A is single,which leads to high finance risk;in the target selection of M&A,the target enterprise and the Walvax existing business structure is not well matched,and the unreasonable industrial structure leads to the continuous loss;the management is too confident to evaluate the target carefully,resulting in the confirmation on a large amount of off-balance-sheet assets and goodwill,and the amortization of intangible assets and the impairment of goodwill have seriously reduced the profitability of the Walvax;after the M&A,the Walvax adopted an inappropriate integration strategy,and lacks of effective risk control for the agent sales industry.The lack of M&A capabilities has led to a deterioration in Walvax’s performance.At the same time,this paper believes that the weak corporate governance provides an opportunity for the management to run over-confident-led M&A;Shareholders,and management’s reduction of stocks to get cash flow has weakened their motivation to improve the performance of M&A.After sorting out the trading parties of the Walvax,this paper also believes that the Walvax’s M&A has the possibility of benefit transfer.Finally,through the analysis of the reasons for the deterioration of the Walvax’s M&A performance,this paper puts forward corresponding suggestions.