Research On The Cross-border M&A Performance Of Fosun Pharma

With the 19 th national congress of the communist party of China(CPC)raising "healthy China" to the level of national strategy,the current Chinese pharmaceutical and biological industry,as a key industry supported by the state,is in a period of vigorous development.Transnational mergers and acquisitions have become an important development mode in the industry.The research object of this paper,Fosun Pharma,officially started its internationalization strategy in 2013.In the period from 2013 to 2018,Fosun Pharma has implemented a number of cross-border mergers and acquisitions,and is a representative of the industry that adopts the development strategy of cross-border mergers and acquisitions.In the context of immature development of the current pharmaceutical and biological industry,the changes of domestic policy environment have led to the failure of many enterprises to form a stable profit model.Therefore,it is of great significance to study the performance of Fosun Pharma’s cross-border m&a for its future development and other enterprises’ implementation of cross-border m&a strategy.Firstly,this paper reviews the current domestic and foreign literatures on transnational mergers and acquisitions,and summarizes the main theories on transnational mergers and acquisitions,including the eclectic theory of international production,the theory of synergies,the principal-agent theory,the theory of market forces,the theory of economies of scale and the theory of rapid development.Secondly,it analyzes the situation and motivations of Fosun Pharma’s cross-border mergers and acquisitions,and concludes that Fosun Pharma’s main reasons for cross-border mergers and acquisitions are to acquire core advantageous technologies,improve its industrial layout,and expand advantageous brands and markets.The financial index method and economic value added method are mainly used to evaluate the performance of Fosun Pharma’s cross-border m&a.The research shows that Fosun Pharma has continuously implemented the cross-border merger and acquisition strategy,which has improved the product profit and expanded the asset scale.However,it has not brought the earnings and growth of Fosun Pharma beyond the average level of the industry.On the contrary,it has led to the decline of profitability,the pressure of debt paying ability,and the great uncertainty of future growth.At the same time,the indicators of economic value added in 2018 were significantly reduced by cross-border mergers and acquisitions,which indicates that Fosun Pharma’s cross-border mergers and acquisitions have not created value for shareholders at present,and it still needs to integrate the mergers and acquisitions after the mergers and acquisitions.In view of the problems of Fosun Pharma in the process of performance analysis,this paper puts forward Suggestions on the future m&a development of Fosun Pharma from the national policy level and enterprise practice level.Performance,as an evaluation method of the enterprise’s operation and development,plays an important role in guiding the enterprise’s operation.Performance can evaluate whether the current strategy is suitable for the development of the enterprise and find the problems in the implementation of the strategy.Through the research on the performance of Fosun Pharma’s cross-border mergers and acquisitions,the relevant countermeasures and Suggestions are obtained.On the one hand,it is helpful to improve the cross-border mergers and acquisitions ability of pharmaceutical and biological enterprises and achieve the goal of crossborder mergers and acquisitions.On the other hand,it also helps to promote other enterprises to improve their position in the international market through cross-border mergers and acquisitions.