Research On The Motivation And Performance Evaluation Of By-Health's High-premium Acquisition Of LS

In recent years,high premium mergers and acquisitions have been common in the market.In order to quickly enter the market,achieve strategic transformation or expansion,acquirers will choose well-developed target companies for mergers and acquisitions.However,due to the acquirer’s good expectations for the development after the merger and the difficulty in accurately evaluating light assets,the evaluation value of the target company by the acquirer is far higher than the value of the enterprise itself,resulting in high premium mergers and acquisitions.Since the release of the "Healthy China 2030" Plan Outline in 2016,the country has successively introduced many policies to support the big health industry.Coupled with the emergence of population aging,sub health and other issues,people’s market demand for health products has sharply increased.The development space of the health product industry is huge,and the health product industry is thriving.In order to compete for this big cake,some enterprises choose to quickly achieve strategic expansion through mergers and acquisitions,Improve the competitiveness of enterprises and thereby increase market share.In recent years,many foreign health product companies have entered China through cross-border e-commerce,further intensifying industry competition,intensifying M&A activities within the industry,and gradually increasing M&A considerations.High premium M&A is now frequent in the health product industry.The emergence of high premiums is often accompanied by risks and opportunities,and whether these high premium mergers and acquisitions can play a good promoting role in the future development of enterprises is the focus of attention from all parties.This article selects a representative company,Thomson Beijian,which is a leading enterprise in the health product industry.Taking its high premium mergers and acquisitions as a case study,combined with the background of the health product industry and the company’s own development situation,and based on the merger premium theory,this article provides a specific analysis of the motivation and performance evaluation of Thomson Beijian’s high premium merger and acquisition of LSG,enriching relevant literature.Among them,the motivation is analyzed in four aspects,including short-term performance evaluation,long-term financial indicators,and long-term non-financial indicators to comprehensively evaluate the high premium M&A of Thomson Bejian.Research has found that the reasons for Thomson Bejian’s high premium mergers and acquisitions are mainly analyzed from four aspects.Firstly,they are eager to seek new profit growth points.Due to obstacles in channels and marketing,Thomson Bejian has fallen into a dilemma of slow revenue growth.The company has launched e-commerce branding and large single product strategies to break this dilemma,and has successfully pushed up the premium for the two major strategies;The second is that the core assets of the target enterprise are intangible assets,and the evaluation has uncertainty and subjectivity;The third is that the target enterprise has good growth potential,and the enterprise is willing to spend high prices on mergers and acquisitions;Fourthly,the synergy effect with the target enterprise is significant,and after the merger and acquisition,the industry leadership positions of both parties can be maximized to integrate and utilize high-quality resources of both parties.After high premium mergers and acquisitions,the market has responded well in the short term.In terms of financial indicators,from the results of factor analysis,it can be seen that the high premium M&A did not significantly improve financial performance,and the payment of high M&A consideration reduced the company’s debt paying ability.However,it also effectively utilized the company’s funds.In addition,LSG’s performance in 2019 did not meet expectations,and a large impairment provision was made that year,which had a negative impact on the company’s profitability and growth ability.In terms of non-financial indicators,after the high premium merger and acquisition,the market share of Thomson&Johnson in the health food and dietary supplements market increased,but the growth in total market value showed a slow and then increasing trend.