Will High Premium M&A Bring High Performance?

This paper mainly discusses and analyzes the impact of high premium M &A on M & a performance based on two cases.The argument of this paper is that“high premium M & A may not bring high performance”.The content of this paper focuses on this argument.Many objective factors have been considered in the comparison of the two companies,i.e.China Resources Sanjiu and Fosun Pharmaceutical.Both of them are typical enterprises in the pharmaceutical industry.They are in the same industry background,and both of them are M & A activities in 2012.The same evaluation methods for the merged enterprises are income methods.All of these objective factors are the same.After the objective factors have been excluded It is the difference of premium and parity and the difference of payment method between the two companies used for research.This paper first introduces the merger and acquisition process of the two cases,i.e.CR Sanjiu and Fosun Pharmaceutical.When CR Sanjiu acquired Guilin Tianhe,there was a high premium merger and acquisition.When Fosun Pharmaceutical acquired Alma company,it was a normal merger and acquisition,and when analyzing the merger and acquisition process,it was found that the payment methods of the two companies were quite different.Secondly,this paper analyzes the M & a performance of China Resources Sanjiu and Fosun Pharmaceutical through the financial index analysis and EVA evaluation method to verify the argument.By analyzing the internal causes of the high premium M & A of China Resources Sanjiu and its impact on the M & a performance,and comparing with the reasons of Fosun pharmaceutical's high performance,this paper concludes the reason why the high premium M & A does not necessarily bring high performance At the end of the paper,the author expounds the conclusion and further discusses the M & A activities,enumerates some problems in the analysis process,tries to find out how to be a reasonable and effective M & A activities,and puts forward relevant suggestions.The EVA evaluation method mainly includes the calculation of after tax operating profit,EVA tax adjustment and weighted average cost of capital ratio.When using the financial index analysis method,we mainly evaluate the M & a performance of Cr 39 and Fosun Pharmaceutical through the following fouraspects: profitability,growth ability,solvency and operation ability.Through reading 2012-2018 annual report,combining data and indicators,this paper analyzes whether the M & A events of China Resources Sanjiu and Fosun Pharmaceutical are successful.After analysis,it is found that after high premium M & A of China Resources Sanjiu,the high premium M & A behavior of cash payment does not bring high performance,while the normal M & A of Fosun Pharmaceutical by means of leverage acquisition makes the enterprise performance present after M & A Upward trend.The comparison of the analysis results answers the core argument of this paper,that is,the high premium M & A that “looks beautiful” does not seem to bring high performance.At the same time,I also hope that this dual case analysis of M & a performance can provide my own perspective for the case study of M&A.