Merger And Acquisition Performance Analysis Of Listed Pharmaceutical Enterprises

The number of mergers and acquisitions enterprises in China recently continues to increase with the rapid development of capital market,and the amount of M&A has reached 5 trillion by 2017.As the pharmaceutical industry,which is closely related to national health,is supported by the policy,and the situation of maintaining a far higher than the average market growth rate has developed rapidly and has become one of the areas of frequent M&A activities.However,China’s pharmaceutical companies have low concentration,low R&D investment,and weak innovation ability.As a result,China’s pharmaceutical companies are mainly small and medium-sized pharmaceutical companies,and M&A is selected as a way to upgrade and transform enterprises.Once it fails,a large amount of human and financial resources are lost.The waste of material resources is bound to give a heavy blow to these weak enterprises,affecting the sound development of the entire pharmaceutical industry.Therefore,it is particularly important to study whether M&A can improve the performance of pharmaceutical companies.Based on this,this essay takes the case of M&A in the pharmaceutical industry between Shanghai and Shenzhen in 2013-2016 as a data sample,constructs a score performance function by factor analysis method,and then divides the results into two groups according to the company’s governance ability.The difference in M&A performance between enterprises with weak corporate governance ability,and finally through regression analysis,to find out the factors that can significantly influence the changes in M&A performance at different stages of M&A.The essay establishes factor models for 11 indicators of shareholders’ profitability,profitability,earning capacity,solvency and operating ability by using financial indicator method,and calculates the comprehensive score function,based on 52 mergers and acquisitions of listed pharmaceutical companies in Shanghai and Shenzhen Stock Exchanges from 2013 to 2016 as samples.The results show that the performance scores of the year before M&A,the year of M&A,the year after M&A and the two year after M&A are-0.00004,-0.01071,0.00002 and 0.00002 respectively.After verifying the merger and acquisition of the company,the performance change is not obvious.However,after grouping according to the governance capacity,it is found that the performance of the company with strong corporate governance has changed significantly and has a continuous improvement trend,but the mergers and acquisitions with weak governance have not significantly improved the performance.Finally,through regression analysis,the performance scores of the year before the merger,the year of merger and acquisition,and the year after the merger are analyzed to find out the different stages of the merger and acquisition,and which financial indicators have more influence on the change of the M&A performance score.This essay is divided into six parts.The first part expounds the research background,the purpose and significance of the research,the research methods,the research content and the characteristics and shortcomings of this essay.The second part is the literature review,which summarizes the domestic and international pharmaceutical industry.The relevant literature on M&A performance puts forward the viewpoint of this essay.The governance after M&A will significantly affect the M&A performance of the company.The governance ability of the company is an index that cannot be ignored.The third part introduces the theoretical basis of M&A and performance.The different directions of economic theory,transaction cost theory and principal-agent theory,combined with the status quo of mergers and acquisitions in China’s pharmaceutical industry,analyze and explain the mechanism of mergers and acquisitions on corporate performance,and provide a scientific basis for the empirical selection of indicators.The fourth part,through the study of 52 pharmaceutical companies from 2013 to 2016,selects the profitability,profitability,income quality,solvency,and operational capacity of 11 indicators to calculate the comprehensive score function,and evaluate the merger before and after the merger.Changes in performance.The results show that mergers and acquisitions can not bring significant changes to the performance of pharmaceutical companies.However,after the results of the enterprise’s governance ability are divided into two groups,it is found that the enterprises with strong corporate governance ability have obvious performance after merger and acquisition,and the influence of mergers and acquisitions with weak governance ability on enterprise performance is not significant.Based on this,through the method of regression analysis,it is further explored which financial indicators have more significant impact on firm performance at different stages of M&A.The fifth part is based on the empirical results,starting from the factors affecting the performance of mergers and acquisitions in the pharmaceutical industry,combined with the current problems in the pharmaceutical industry in China,from the choice of mergers and acquisitions and government positioning,and put forward research prospects.