Case Study Of Hony Capital Investing Simcere Pharmaceutical

With China's entry into WTO and the development of the world economic integration, many domestic industries have been faced up with rapid growth and large market with potential. But, the overall industry efficiency is low and lacks competitiveness because of their unreasonable overall layout, low concentration, aging of technology and malignant competition, such as the medicine industry. Therefore, the whole industry urgently need to be conformed in order to optimizing the resources allocation in the industry and improve the competitiveness. But, the need for large amount of fund in a short time becomes the bottleneck of the industry's conforming and development. In this case, the enterprises in the industry need urgently the outside capital to merge and acquire other enterprises to scale up and occupy the market so that they can take the favorable position for competition and make their dream of industry leader come true. As to the investors of M&A, they can use this chance to participate in the enterprises with development potential and use their own brand, management experience and financial advantage to improve the invested companies'value rapidly and realized the quick value-adding of the capital.With the above argument as the core, this paper has elaborated it in the following three aspects:1,brief the strategic layout of Lenovo and the development history of Hony Capital and Simcere Pharmaceutical; Introduce the basic information of Hony Investing Simcere Pharmaceutical.2,with the analysis of Hony's investment in the medicine industry, China's medicine industry and Hony's investing in Simcere Pharmaceutical, this paper has explored the reason for Hony's investing in Simcere and Simcere's choosing Hony as the strategic investor from the real-world aspect.3,brief the basic principles of successful M&A and the risk and its elusion means of enterprises'development by using outside resources.