A Study On The Synergistic Effect Of Horizontal M & A In China 's Pharmaceutical Industry

In recent years, the number of mergers and acquisitions event in China’s pharmaceutical industry continues to rise and the amount involved in those events has been increasing year by year. The pharmaceutical industry has been experiencing an M&A climax. Enterprises in this industry attempt to continuously expand their business scope, enhance the management and accelerate their own external growth through M&A. However,M&A is risky, failures are not rare in M&A events in recent years and synergy effect is the key to the success of mergers and acquisitions. Thus, to objectively evaluate the synergy effect of M&As not only has theoretical significance, but also has more important practical significance.Via analyzing the characteristics of the M&A of China’s pharmaceutical industry, this paper selected the China Resources Sanjiu Medical&Pharmaceutical’s horizontal M&A events as a case. Adopting the financial index method to establish the synergy effect evaluation system and utilize this system to evaluate enterprise the operation synergy, management synergy and finance synergy in the case. In addition to financial index system, this paper also evaluates the M&A synergy effect from the perspective of corporate strategy. Through the analysis and evaluation of the case’s merger synergies, this paper finds that how does the pharmaceutical industry enterprises can obtain the merger synergies and hopes the result will be helpful to related enterprises in this industry.This article is divided into six parts. First, it expounds the research background, the significance, the purpose of the article, methods adopted, and reviews the related literature. Then this paper introduces the concept and the classification of M&A and merger synergy effect. And in this section, I determined to use the financial index method as the main method of this paper., and USES the financial index method as the main method of this paper. Then the paper summarizes the present situation in pharmaceutical industry and sums up the problems existing in the industry, and by summarizing the characteristics and motivation of pharmaceutical industry’s mergers and acquisitions, the paper concludes that the main type of M&A in China’s pharmaceutical industry is the horizontal type, which ensure the scope of the study. Then, the financial index method was applied to build synergy effect evaluation system, for the support of the later analysis in the cases. After that, there goes the introduction of the case, which is focusing on two analytical perspectives—the financial index evaluation system and the enterprise strategic goals. Finally, on the basis of the final analytical result, this paper summarize the successful experience of the case for the enterprises who will be soon faced with a climax in the pharmaceutical industry. Then the paper raised the deficiencies departments of its own.