Research On The Motivation And Performance Of Cross-Border Mergers And Acquisitions Of Chinese Health Care Companies

Under the environment of good national economic development,rising income level of residents and strong market consumption demand,people are paying more and more attention to health issues.In the post-epidemic era,more and more people are aware of the importance of health,and various types of nutritional health products have emerged in the market and are favored by consumers."The 13th Five-Year Plan(2016-2020)clearly proposes to vigorously develop new nutritional health foods,such as dual-protein foods and nutritionally fortified foods.The 14th Five-Year Plan(2021-2025)further advocates the development of traditional Chinese medicine health products.Since then,China’s health food market has been developing rapidly and the competition in the whole industry has become fierce.In order to improve the competitiveness of enterprises,many enterprises in the industry have chosen cross-border mergers and acquisitions to improve their business performance by cooperating with influential foreign enterprises.Based on this,it is very necessary to study in depth whether cross-border M&A is beneficial to the long-term development of enterprises and can bring additional wealth to investors.This paper takes BY-HEALTH’s cross-border M&A of LSG as an example,and integrates existing theoretical studies on cross-border M&A,using financial indicator analysis,event study method,and non-financial indicator method to comprehensively analyze the motivation of this M&A,and the changes in corporate performance before and after the M&A.In order to further understand the motivation of this M&A case,this paper also integrates non-financial performance to explore whether the company improves its performance through this M&A.The findings of this paper will be of great reference value to other health care companies in China in conducting M&A and determining the future direction of development.The main findings of this study are as follows:First,the short-term stock market reaction.The M&A brought positive wealth effect to BY-HEALTH,and investors generally recognized the M&A event,which showed a significant positive effect.Second,the medium-and long-term financial performance of BY-HEALTH is analyzed.BY-HEALTH has successfully opened up the probiotics market through this cross-border M&A and further revitalized the market vitality of the company.This is reflected in the fact that the company has significantly improved its current asset operating capacity and maintained a stable profitability and total asset operating capacity after the M&A.The analysis reveals that BY-HEALTH’s solvency decreases after the M&A payment,and the enterprise needs to expand its development scale after completing the M&A,which requires more liquidity,so it is recommended that BY-HEALTH remains vigilant.After BY-HEALTH’s cross-border acquisition of LSG,the overall scale of the enterprise’s operations has been qualitatively improved,significantly increasing its development capacity.Finally,the analysis is in terms of non-financial performance.After the M&A,BY-HEALTH has initially achieved its M&A objectives.The product range has been further refined to form a rich product line,which is conducive to developing foreign markets,and the enterprise has effectively controlled its period expenses and brought into play management synergies.All data indicate that BY-HEALTH has performed well in all aspects after the merger.It is recommended that the company continue to increase its efforts to integrate the acquired companies in order to further exploit synergies.