Study On The Performance Of Fosun Pharma M&A Gland Pharma And If's Enlightenment

With the advancement of country's comprehensive strength,overseas mergers and acquisitions have become an essential way for Chinese enterprises to go out and actively participate in international cooperation and activities.On the one hand,mergers and acquisitions can accelerate the market competition and catalyze the survival of the fittest by integrating superior resources.On the other hand,enterprises can quickly deploy the industrial chain and improve their competitiveness.The report of the 19 th National Congress of the Communist Party of China raised "healthy China" to the national strategic level.The healthy development of the pharmaceutical industry is the meaning of the implementation of the "healthy China" strategy.Under the background of the continuous introduction of the national pharmaceutical industry policy and the acceleration of the integration of the pharmaceutical industry,the heat of mergers and acquisitions in the pharmaceutical industry continued to rise,setting off the climax of mergers and acquisitions.In July 2016,Fosun Pharma initiated an acquisition offer with Gland Pharma and completed the acquisition in October 2017.The acquisition of Gland Pharma by Fosun Pharma is regarded as a model of pharmaceutical cooperation between China and India.Therefore,this article selects the case of Fosun Pharma's acquisition of Gland Pharma as the research object,and takes Fosun Pharma's motive to acquire Gland Pharma as a first step.To analyse whether the operation status of Fosun Pharma has been improved after the merger,and to sum up the significance of the case for the merger and acquisition of China's pharmaceutical industry.Except to the introduction,this article is divided into five parts.The second part is a literature review.This paper sorts out the research on the strategic motivation and performance of the cross-border M&A by domestic and foreign scholars,and summarizes the research on the M&A performance of the pharmaceutical industry,and reviews the existing research.The third part is a brief introduction to the case of Fosun Pharma's acquisition of Gland Pharma.It mainly analyze the development environment of China's pharmaceutical enterprises and then introduces the basic status of Fosun Pharma and Gland Pharma,as well as the M&A process and M&A motivation.The fourth part is the performance analysis of Fosun Pharma's acquisition of Gland Pharma.This part use event study to analyzes the short-term performance of M&A,and uses market model method to calculate expected and excess returns to evaluate whether M&A brings value to shareholders.In terms of financialperformance,this paper select typical financial analysis indicators to analyze mid-and long-term M&A performance.In terms of non-financial performance,from the motivation of Fosun Pharma's acquisition of Gland Pharma,it analyzes the development status after the merger.The fifth part is the enlightenment of Fosun Pharma's acquisition of Gland Pharma.This part summarizes the performance of Fosun Pharma in the process of merger and acquisition,and sorts out the experience that other pharmaceutical companies in China can learn from in the process of transformation and upgrading through mergers and acquisitions.This paper believes that the development of China's pharmaceutical industry is deeply affected by the policy.The state's support for innovative drug research and development and the reform of the pharmaceutical industry have entered the deep water area,which has driven pharmaceutical companies to complement the defects through external expansion while improving the industrial chain and to enhance competitiveness.The research results show that Fosun Pharma's motivation for M&A Gland Pharma is to promote company's "4IN" strategy,in order to meet the needs of international strategic layout and to expand the product chain through expansion.In terms of M&A performance evaluation,the event research method calculates that the cumulative abnormal return is greater than zero,indicating that in short term shareholders' s wealth has increased,through the analysis of the financial indicators after the merger,Fosun's profitability and operational capacity are slightly reduced,and the growth ability is good and the debt ratio is rising.Through the analysis of non-financial performance,the brand value of Fosun Pharma is improved,the international manufacturing capability is strengthened,and the strategic internationalization of the group is accelerated.Finally,based on the actual situation of the case,this paper puts forward corresponding suggestions for the M&A activities of pharmaceutical companies.These suggestions have certain guiding significance for pharmaceutical enterprises to achieve industrial upgrading through mergers and acquisitions.