Research On Value Creation Of Vertical Integration Continuous Merger And Acquisition Of Kpc Pharmaceuticals,Inc

The pharmaceutical industry is an important industry related to the national economy and people’s livelihood.Influenced by national policies,aging population,disposable income of human settlements,pharmaceutical research and development and other factors,Chinese pharmaceutical enterprises develop rapidly,mergers and acquisitions in the pharmaceutical industry continue to increase,the success rate of mergers and acquisitions year by year,the number of mergers and acquisitions also began to increase,the phenomenon of continuous mergers and acquisitions gradually become a hot spot in the study of mergers and acquisitions.As a development strategy,vertical integration continuous M&A is helpful for the company to carry out the layout of the whole industrial chain.More and more pharmaceutical enterprises choose to implement vertical integration of continuous mergers and acquisitions,open up the upstream and downstream industrial chain,in order to create enterprise value.The purpose of enterprise production and management is to maximize the value of the enterprise and create value for the shareholders,and it should also take the creation of value as the goal of enterprise development and management.The realization path and realization of enterprise value creation is worth studying.At present,the research on longitudinal integration of pharmaceutical enterprises is mainly focused on performance,and the research on value creation is very limited,which needs to be supplemented.Starting from pharmaceutical enterprises,this paper selects Kpc Pharmaceuticals,Inc,which implements vertical integration of continuous mergers and acquisitions,as a case study to study the value creation of vertical integration of continuous mergers and acquisitions.Based on the vertical integration strategy,more than 20 vertical mergers and acquisitions occurred in the company from 2014 to 2021,which is representative of the research.This paper first reviews the industrial chain theory and industrial organization theory,introduces the case background of Kunming Pharmaceutical Group vertical integration of continuous M&A,and is specifically divided into backward integration of continuous M&A and forward integration of continuous M&A case introduction.Secondly,combined with the theoretical basis of M&A motivation,this paper analyzes the value creation path of Kunming Pharmaceutical Group’s vertical integration M&A,and finds that through vertical integration of successive mergers and acquisitions,Kpc Pharmaceuticals,Inc can enhance market competitiveness,expand market share,ensure the stability of production and marketing,reduce transaction costs,acquire internal resources of the acquired party,and improve the core competitiveness of the enterprise.It realizes the value creation of market power,transaction cost and organization management from different paths.After that,the financial data from 2014 to 2021 were selected by financial index method and economic added value method to analyze the financial value creation effect of the enterprise.It was found that the profitability and development ability of Kpc Pharmaceuticals,Inc were significantly improved,and vertical integration continuous merger and acquisition could realize the financial value creation of the enterprise.Then,the M&A events from 2014 to 2021 are screened,and the effect of market value creation is analyzed by the event study method.It is found that the average cumulative excess rate of return is on the rise,and vertical integration continuous M&A can achieve market value creation.Finally,based on the case analysis,this paper summarizes the problems affecting the value creation in the vertical integration of Kpc Pharmaceuticals,Inc,and puts forward suggestions,emphasizing that enterprises should pay attention to R&D innovation,carefully choose the merger target and attach importance to the integration after the merger.Through the study of this paper,it is confirmed that Kpc Pharmaceuticals,Inc through vertical integration of continuous mergers and acquisitions is conducive to the promotion of enterprise value,can enrich the research results of enterprise vertical integration of continuous mergers and acquisitions of value creation,and provide a reference for pharmaceutical enterprises to carry out vertical integration of continuous mergers and acquisitions to achieve enterprise value creation.