Motivation And Target Selection For Overseas M&A Of The General Health Industery Under The "Belt And Road" Initiative

The current world economic landscape is undergoing profound and complex changes.China has made tremendous achievements in opening up to the outside world and actively integrating into economic globalization.However,China still faces severe development problems and urgently needs to deepen reforms.In 2013,General Secretary Xi Jinping proposed the "Belt and Road" initiative.Since then,the Chinese government has encouraged and guided Chinese enterprises to "go global" and explored and tried new cooperation models,which have had a huge impact on the economic transformation and upgrading of Chinese enterprises.According to research data,since the "Belt and Road" initiative was proposed,the number of M&A and transaction amounts of Chinese enterprises in countries along the route have increased substantially.Therefore,it is very important to study the cross-border mergers and acquisitions of Chinese enterprises along the "Belt and Road".The general health industry is an emerging industry in China.At present,China is facing the problems that the consumer market is not fully opened,the industry chain is scattered,the business model is backward,and research and development and technological innovation are insufficient.In the report of the 19th National Congress of the Communist Party of China,the implementation of the "Healthy China Strategy" was clearly proposed,which put forward more requirements for the development of the general health industry.In the critical period of the transformation and upgrading of the general health industry,companies take the“Belt and Road"initiative express and actively carry out cross-border mergers and acquisitions in countries along the route,hoping to introduce foreign advanced technology,resources and experience into the country to achieve a "springboard" overtaking and promote enterprises transformation to enhance the international competitiveness of enterprises.The prerequisite for achieving successful cross-border M&A is to clarify the M&A motivation of the enterprise,and to find a suitable M&A target based on the motivation.Therefore,it is of theoretical significance to study what motives for cross-border M&A in the context of the "Belt and Road" and how to select cross-border M&A targets based on the motives for M&A,promote the strategic layout of the general health industry,and realize the expectations of cross-border M&A by enterprises.It has certain theoretical and practical significance.In response to the above problems,this paper adopts a combination of literature research and case studies,and selected the three M&A cases of Sanpower Group among the top 10 M&A transactions by the Chinese companies in the health sector from 2014 to 2017 issued by PWC to countries along the "Belt and Road".In this case,the use of industrial synergy theory,springboard theory and location theory to analyze the impact of the "Belt and Road" initiative on China’s major health companies ’ overseas mergers and acquisitions and the motivation of the general health companies’cross-border mergers and acquisitions and how to select targets based on strategic motivations.This paper draws the following conclusions through research:First,the "Belt and Road" initiative promotes overseas mergers and acquisitions of the general health enterprises,mainly reflected in providing policy support,tax incentives and reducing financing constraints for enterprises;Technical aspects and the verticalization and specialization of health business are the main motives for the general health companies’overseas M&A;third,the general health companies’ overseas M&A tends to select developed countries along the "Belt and Road" in target countries,and tends to target industries for companies in the same industry,they tend to complement complementary companies with advantages in technology resources in terms of target enterprise selection.The innovation of this paper is to analyze the motivation and target selection of cross-border mergers and acquisitions of the general health enterprises from the perspective of the "Belt and Road",and use cases to confirm the impact of the "Belt and Road" initiative on the transformation of the general health companies.