The Impact Of M&A On Enterprise Growth

Since the 21st century,China's pharmaceutical industry has developed rapidly,and now it has become the second largest pharmaceutical market in the world after the United States.Some pharmaceutical enterprises in China have been growing in strength and started the process of global distribution and operation.Merger and acquisition is not only one of the ways to promote the development and growth of companies,but also an indispensable economic activity in the economic market.The rapid development of enterprises brought about by mergers and acquisitions is also the main reason for many enterprises' strategic choices.With the aggravation of social aging,the deepening reform of separation of medicine and the loosening of the policy of medical e-commerce,the prospect of the pharmaceutical industry is still promising.Under the modern market economy,the expansion of pharmaceutical companies mainly depends on two ways: one is internal growth,which depends on the accumulation of enterprises themselves,and the other is external M&A,which expands itself by merging other companies,market integration,resource integration and technology integration.Moreover,it takes a long time for pharmaceutical companies to develop new drugs.It may take more than ten years for a new drug to be developed and finally marketed.In the market,the barriers of the pharmaceutical industry are high,the market is very strict in the regulation of new drugs,and there are great risks in the research and development of new drugs.Therefore,many pharmaceutical companies will launch mergers and acquisitions forsome small pharmaceutical companies with R&D capabilities to speed up the expansion of new products.At the same time,mergers and acquisitions can diversify risks,broaden the resource market and enter new fields.The concentration of domestic pharmaceutical industry is not high,and the technology content of small and medium-sized enterprises is low,but they can seize market share by virtue of geographical advantages and cost-effective advantages.Therefore,some large-scale medical enterprises try to import advanced foreign technology through cross-border mergers and acquisitions,enhance their own strength,shape a platform to enter the international market,and seek new markets.This paper chooses Fuxing Pharmaceutical Co.Ltd.as the research subject.Through event study,growth indicatorsand some domestic and foreign literature synthesis theory,this paper makes a concrete analysis of Fuxing Pharmaceutical Co.,Ltd.to explore the impact of M&A on the growth of pharmaceutical enterprises.As a leader of M&A in the pharmaceutical sector in recent years,Fuxing Pharmaceutical has actively expanded its overseas market with huge market prospects.At the same time,it has introduced high-end technological resources,improved the company's industrial chain and formed strategic complementarity.However,it is equally important to integrate and absorb the resources of the acquired company.Through the acquisition of Israel Lifeton Laser Company in 2013 and India Pharmaceutical Company in 2017,this paper analyses the impact of the two acquisitions on Fuxing Pharmaceutical Company,and draws corresponding conclusions based on the analysis of the company's business income,operating capacity and cash flow.From the perspective of market reaction,M&A brings short-term announcement effect to enterprises,but it does not create value for investors.However,from the perspective of total assets,fixed assets,capital structure and cash flow,M&A promotes the long-term growth of Fuxing Pharmaceutical.