WALVAX’s Case Study Of Divestitures

Since started the policy of reform and opening up,Chinese enterprises began to mergers and acquisitions in order to improve their own supply chain,seek more core resources,and enter other markets more quickly.So,the wave of mergers and acquisitions set off.In the period,China’s economic level and scientific and technological level had rapid development.So China’s enterprises continued to innovate in order to base themselves on the market.The competition between each other was also becoming more and more intense.In the competition,the core competitiveness of enterprises was gradually no longer prominent.So enterprises had to start choosing from diversification to specialization.In 2015,China proposed "supply-side structural reform",which has five major goals: de-capacity,de-inventory,de-leveraging,cost reduction,and short-boarding.Driven by this reform,the boom in divestitures has been even greater.This paper selects the case of WALVAX asset divestiture for research to clarify the mechanism of improving the performance of asset divestiture,for enrich the research of asset divestiture in China,and for help enterprises learn how to reasonably implement asset divestiture to improve corporate performance and promote its sustainable development.In this paper,the case of WALVAX stripping Genor Biology is studied on the existing research results at domestic and foreign.By combing the divestiture plan,the divestiture process,and combined with the public information and data related to the case,this paper analyzes the motives for the divestiture of WALVAX’s assets,which has two motives,one is to obtain capital inflow to solve the problem of insufficient funds;the other is to implement the strategy of denuclearization to return to the core business of vaccines.Then,the behavior of WALVAX’s asset divestiture is analyzed,and its divestiture plan and the optimal allocation of resources after the divestiture are analyzed to illustrate how the divestiture of WALVAX’s assets has formed economic consequences.Finally,the economic consequences of asset divestiture are analyzed,and the economic consequences of asset divestitures are explained to WALVAX.Due to the market investment’s distrust of management and other reasons,and then its asset divestiture behavior is not optimistic.They choose to "vote by feet".The short-term market performance is not good.WALVAX announced the reply to the inquiry letter.Then,the market performance improved.However,after the successful completion of the asset divestiture,WALVAX obtained funds,and then optimized the allocation of resources after the divestiture of these funds and other resources,which made the long-term financial performance of WALVAX improve.Finally,according to the WALVAX asset divestiture case,it is enlightened that:first,the decision-making behavior of the enterprise should be in line with its strategy;second,the enterprise proactively choose divestitures for achieve a naturalization strategy;third,the enterprise should tailor the asset divestiture plan;forth,the enterprise pay attention to the asset integration after the divestiture of the enterprise.