Research On Serial M&As Performance And Influencing Factors Of Listed Companies

Since the reform and opening up to the present decades,China's medical device industry has started from scratch and has now developed into the world's third largest market after the United States and Japan.The improvement of people's living standards,social aging and the introduction of relevant policies will make China's medical device market enter a new stage.With the deepening development of the domestic capital market and the improvement of the system,the activity of M&A gradually becomes an important method to seek the fast development of listed companies,the enthusiasm of all kinds of enterprises participating in M&A activities has been on an unprecedented rise.The number and amount of transactions in domestic M&A markets hit record highs.Many medical equipment companies also follow the wave of mergers and acquisitions.They rely on rapid development through series M&A activities,rapidly expanding and strengthening.Xinhua Medical is one of the typical representatives of them.In order to get a deeper understanding of the current situation of the development of medical device enterprises in our country and provide useful suggestions for the next M&A in the industry,this article will combine the domestic and foreign scholars on the theoretical basis of M&A and use case studies to select Xinhua Medical as the research object,make a deep analysis of Xinhua Medical serial M&As performance problems.This paper first collate and summarize the domestic and foreign continuous M&A motivation,performance and influencing factors related research,clearly define the concept and pave the theoretical bedding for the following text.Then describe the current situation of Xinhua Medical's industry,review its serialM&As history,come to a series of characteristics of M&A transactions.In the meantime,the article combines Xinhua Medical's recent development plan,explaining the motivation of Xinhua Medical's continuous M&As from external causes and internal development needs.Then through the Event Study Methods to analyze the short-term performance of M&A,using DuPont analysis method to get the financial performance results after serial M&As.Finally,the paper analyzes the reasons that affect the performance of serial M&As,and gets the enlightenment on the M&A activities in the future.The results indicates that Xinhua Medical serial M&As are mainly to follow the industry trend,with the capacity of the circumstances,companies want to increase the existing product range,extend the industrial chain,expand the medical service market.However,though the scale of the M&A business expanded rapidly and the operating income plummeted,further analysis showed that the short-term M&A performance of the enterprise was good but the recent decline showed its overall financial indicators of long-term profitability,solvency and operating capability showed a downward trend.The reasons that affect the performance of serial M&As include that the single payment method aggravated the company's financial risk;policy reasons and poor management led to a huge decline in the performance;didn't have sufficient time to establish a scientific management system in line with the scale of the enterprise.The enlightenment obtained by this paper is that in the future merger and acquisition activities,enterprises should carefully select the target,control the merger premium,choose a reasonable way of payment in the matter,and afterwards strengthen the integration of resources and build a management system in line with the scale of the enterprise.This article analyzes the case from a more comprehensive point of view,uses ROE as the breakthrough point to carry out the long-term performance evaluation by the method of chain substitution.Hope this artical can provide reference to other related enterprises that make M&A similar to this company.