| With the accelerating process of population aging and the change of residents’ living habits,the number of new cancer cases in China is gradually increasing,and oncology medical services are facing the current situation that demand exceeds supply.Unlike the ophthalmology,dental and medical checkup industries which are more mature,the private oncology medical industry is affected by the technical barriers and large initial investment,so its development is slow.As one of the few companies in this industry with a complete industrial chain,technical advantages and medical resources,INKON Life’s experience in multiple mergers and acquisitions is somewhat representative and meaningful.Therefore,this paper selects INKON Life’s successive M&As as a case study to analyze the motivation of INKON Life’s successive M&As,to investigate how INKON Life’s successive M&As affect its subsequent economic consequences,and whether the long-term and short-term economic consequences of successive M&As are consistent.Based on the life of the firm theory,synergy theory,resource base theory,and dynamic capability theory,this paper examines the motivation and economic consequences of successive M&As by INKON Life from 2015 to 2022.The external motivation for the successive mergers and acquisitions is mainly due to the lack of momentum in traditional industries and the strong growth prospects of the healthcare industry.The internal motivations are mainly due to bottlenecks in corporate development;frequent reductions by managers for personal gain;seeking to master technological advantages;and exploiting synergy effects.In terms of the economic consequences of successive mergers and acquisitions,firstly,the event study method was used to analyze the short-term economic consequences,and it was found that the overall CAR value of mergers and acquisitions was positive,but the trend showed an inverted "U" state,indicating that mergers and acquisitions can bring positive effects in the short term.Secondly,we analyzed the financial aspects of the long-term economic consequences by using the financial index method and the economic value-added method,and found that,except for the improved management synergy,the operational synergy,the financial synergy and the economic value-added all showed an inverted "U" trend,i.e.,the continuous mergers and acquisitions did not achieve real profitability and could not bring positive wealth effects to investors.This means that the successive mergers and acquisitions have not been profitable and have not brought positive wealth effects to investors.Finally,the four indicators of R&D innovation,talent structure,market opinion,and social responsibility are introduced in the non-financial level,and it is found that the company actively fulfills its social responsibility after successive M&As,and its R&D innovation capability and personnel quality are improved to a certain extent.This paper concludes that the economic consequences of successive mergers and acquisitions show an inverted "U" trend of rising and then declining,which may not provide sustainable development momentum for the future of INKON Life.This paper puts forward the following policy recommendations: First,it is recommended that INKON Life should suspend its M&A transactions,focus on the integration and development of existing resources,and solidly improve its operating performance;it should improve the compensation method for subsequent M&A performance commitments to reduce the risk of high premium M&A to the company’s performance.Secondly,it is recommended to the listed companies in private oncology medical industry: they should clarify their strategic positioning,make reasonable valuation of the target company,and avoid blind M&A;they should prevent the management from reducing their holdings after M&A and strengthen the supervision of the management,so that the M&A decision will be more helpful to the long-term and stable development of the enterprise. |
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