Research On Cross-Border Mergers And Acquisitions In The Medical Device Industry From The Perspective Of Resource Driven

The medical device industry develops continuously with the growth of human health demand,and it is a field that countries all over the world compete for.China’s medical device industry started late,but with the enhancement of the country and the support of national policies,China’s medical device industry is in the golden period of rapid development now,with a growth rate of about 20% in the past three years.It is estimated that the market size of China’s medical device will exceed 700 billion yuan in 2020.However,at present,China’s medical device enterprises are still concentrated in the middle and low-end market,lack of core technology capabilities,with low added value of products,high-end medical devices are still mainly dependent on imports,so the comprehensive competitiveness of domestic industry still needs to be improved.Under the drive of products,the core technology,advanced research and development experience,market,marketing network and brand resources,since 2014,China’s medical equipment industry in cross-border mergers and acquisitions boom,domestic companies hope to realize industrial extension and industrial upgrading through cross-border mergers and acquisitions.Besides,they want to promote the comprehensive competition ability of enterprise,to gain power in the international market,and to become internationally competitive enterprises.There were 27 pieces cross-border mergers and acquisitions case in 2018,with the value of mergers and acquisitions reaching 7.466 billion US dollars,increasing 464 percent year-on-year.The success or failure of cross-border mergers and acquisitions of medical device enterprises not only affects the survival and development of enterprises and employees,but also relates to the technological development and industrial upgrading of the whole industry,affecting the efficiency and quality of national economic development.As the market scale of China’s medical device industry continues to expand and the ceiling effect of market segment continues to intensify,in the future,in order to improve the industry concentration,more and more enterprises will choose to enter the high-end market through cross-border mergers and acquisitions.Therefore,it is meaningful to study the typical cases of crossborder mergers and acquisitions in the medical device industry from the perspective of resource-driven.As a leading enterprise of medical equipment with medium and low value consumables in China,Blue Sail Medical Co.,Ltd ranks the first in the world in terms of production capacity and market share of PVC gloves.However,its products have low added value and lack of development potential.In this case,Blue Sail Medical Co.,Ltd set up the strategic goal of crossing over to the field of high value consumables,and the acquisition of Biosensors International is driven by resources to achieve industrial extension and industrial upgrading through cross-border mergers and acquisitions.Therefore,this paper selects Blue Sail Medical Co.,Ltd as the case study object,explores the transaction process and transaction plan of cross-border mergers and acquisitions of the company,and analyzes the performance of resource-driven cross-border mergers and acquisitions of Biosensors International,so as to provide reference for other medical device enterprises in China to implement cross-border mergers and acquisitions.Through the event study,this article introduces the whole process,including the acquisition of overseas LBO,large shareholder stake and the whole process of a-shares acquisition and merger;besides,it analyses the reasons of cross-border mergers and acquisitions of Blue Sail Medical Co.,Ltd based on resource-driven perspective.Then it analyzes the performance in the cross-border merger and acquisition of Blue Sail Medical Co.,Ltd.From the perspective of event study method,it evaluates the short-term performance of cross-border merger by using the method of cumulative abnormal return(CAR),and concludes that the merger plays a promoting role in the short-term market performance of the enterprise.Secondly,through the analysis of financial indicators,it is concluded that the cross-border merger and acquisition has greatly improved the development ability of the enterprise.The short-term solvency is weakened and the long-term solvency is strengthened,the increase of operating profit margin and net profit margin indicates that the profitability of enterprises is enhanced,but from the analysis of return on assets,net profit margin of total assets and return on equity,the cross-border merger and acquisition reduces the profitability of the enterprise.Finally,from the perspective of the change of main business structure and the change of research & development investment,it is concluded that this merger is conducive to the improvement of the company’s operational decision-making efficiency.On the basis of research,this paper puts forward the following Suggestions for the cross-border mergers and acquisitions of medical device enterprises: Grasp the national strategic intention and make full use of policy resources,Good use of financial means to achieve a win-win situation,Establish a global operation system and give full play to the domestic and foreign linkage advantages,Absorb elite talents and promote the transformation and upgrading of the management team.