Case Study To The Serial M&As Of Qianshan Pharmaceutical Machinery From The Perspective Of Overconfidence Of Managers

With the continuous improvement of China's capital market,the number and amount of transactions in the domestic merger and acquisition market have reached new highs repeatedly.Through merger and acquisition,enterprises can rapidly expand the business scale and obtain synergies.However,many listed companies fall into operational difficulties or even decline due to blind merger and acquisition.Qianshan pharmaceutical co.,ltd.is a typical example.During the seven years of listing,the company's total assets expanded rapidly from 900 million at the beginning of listing to 4.5 billion in 2017 through acquisitions and overseas investment.However,due to blind mergers and acquisitions and excessive expansion,the company frequently broke negative news at the beginning of 2018,such as debt default and credit violation.When conducting mergers and acquisitions and investments,the company needs to consider the impact of the external environment and measure whether it has sufficient resources to integrate management capabilities to determine whether the consequences of the decision are within the company's tolerance.However,studies have pointed out that people are more likely to make irrational decisions in uncertain situations.However,there are a lot of uncertain factors in the operation of enterprises,so some irrational factors must exist in the decision-making of enterprise managers.Among them,overconfidence is a typical manifestation of irrationality.This kind of psychological cognition bias will cause the manager's judgment to be biased,which will lead to distortion of corporate decision-making and consequences.This paper attempts to analyze and summarize the continuous M&A event process and performance factors of Qianshan Pharmaceutical Machinery based on the theory of managerial overconfidence.This paper first expounds the related theories of managerial overconfidence and mergers and acquisitions,and then uses this theory to analyze the continuous merger and acquisition of Qianshan Pharmaceutical Machinery,and uses statistical analysis to explore how the manager's irrational psychology influences its judgment and behavioral deviation.,resulting in distortions in its M&A decisions,financing methods,and the economic consequences of mergers and acquisitions.Based on the analysis of the case,the paper concludes that the Qianshan drug machine manager has a certain degree of overconfidence,which has an impact on the M&A financing decision and thus has a negative impact on its M&A performance.The flawed governance structure is an important reason for the company's managers to generate overconfidence.The paper concludes with a summary of the case study findings and makes recommendations in a targeted manner.The research in this paper can enrich the research results in the field of overconfidence theory,and provide new cases for theoretical research,which can also play a certain enlightening role for modern enterprise management.