Research On Value Evaluation Of Overseas Mergers And Acquisitions Of Pharmaceutical Enterprises

With the rapid development of market economy,M&A activities of pharmaceutical enterprises in China have shown a relatively rapid development trend in the fields of industry,regional scope and amount of M&A.M&A has become one of the important ways for pharmaceutical enterprises to expand their scale and seek development.However,in the rising tide of mergers and acquisitions of medical enterprises,the failure rate of mergers and acquisitions is higher,and the results of mergers and acquisitions are not ideal.The evaluation of target enterprises'value in overseas M&A is often unreasonable,which leads to higher M&A premium.Many enterprises are carrying high goodwill and burying hidden dangers for their future development.In addition,in recent years,the main force of overseas mergers and acquisitions has gradually changed from state-owned enterprises to private enterprises.Unlike the capital advantages of state-owned enterprises,every penny spent by private enterprises is "real gold and silver".Therefore,it is of great significance to choose a reasonable valuation method for Chinese enterprises to achieve sustainable development in overseas mergers and acquisitions.Based on this,this paper mainly studies the value evaluation of target enterprises in overseas mergers and acquisitions of Chinese pharmaceutical enterprises.Firstly,after summarizing the theoretical achievements of domestic and foreign scholars on real options and M&A valuation,this paper summarizes the current academic research status and points out the direction for future research.Secondly,it summarizes the characteristics of overseas M&A valuation of pharmaceutical enterprises based on the current situation and existing problems of overseas M&A valuation of Chinese pharmaceutical enterprises.The applicability of real option method in overseas M&A valuation of pharmaceutical enterprises is analyzed and compared with traditional valuation method to find the basis for future research.Then,the case of A company M&A B company is fully reviewed by case study method,and on this basis,the original valuation method of the case is improved by using binary tree option pricing model.By re-evaluating the enterprise value of Company B,and comparing the results of valuation with those of traditional valuation methods,this paper explains the difference between them according to the principle of binary tree model and valuation process,and verifies the scientificity and rationality of the valuation of the binary tree model with the performance of Company A's merger and acquisition.Finally,through theoretical analysis and case study,the significance and Enlightenment of applying binary tree option pricing model to overseas M&A valuation of Chinese pharmaceutical enterprises are obtained,and the main conclusions of this paper are summarized as follows:(1)The applicability of three traditional valuation methods to overseas M&A valuation of Chinese pharmaceutical enterprises is not strong;(2)In overseas M&A of Chinese pharmaceutical enterprises,binary tree option pricing model is not suitable for overseas M&A valuation of Chinese pharmaceutical enterprises.Tree real option pricing model makes up for the shortcomings of the traditional income method and reflects the overall value of the target enterprise more comprehensively;(3)The valuation results of binary real option model can better reflect the real value of the target enterprise in the actual operation and play a positive role in reducing the premium risk of overseas mergers and acquisitions of Chinese pharmaceutical enterprises.Finally,the paper also discusses the relationship between overseas M&A valuation and transaction price and the further research direction of introducing game theory into real options.