Research On Financial Risk Of Continuous M&a Of Pharmaceutical Enterprises Under Relevant Diversification Strategy

Merger and acquisition is an important means of rapid expansion and transformation of enterprises.In recent years,with the intensification of global competition and local competition,domestic companies have increasingly strong demand for mergers and acquisitions,including pharmaceutical companies.With the increase of income level,people pay more attention to the maintenance of health,and pharmaceutical enterprises are gradually booming.However,the quality level of pharmaceutical enterprises is different,and there are still problems that are difficult to solve in a short time,such as the backward level of independent research and development,the lack of diversification of products,and the slow upgrading of technology.Therefore,more and more pharmaceutical enterprises choose to carry out continuous mergers and acquisitions based on the relevant diversification strategy.However,due to the state’s more and more strict control of pharmaceutical enterprises,the difficulty of their own development is gradually increasing.A large number of research data show that the success rate of pharmaceutical mergers and acquisitions is generally not high,the main reason is that there are financial risks such as performance bet risk,goodwill impairment risk,payment risk and integration risk.Therefore,if enterprises want to properly deal with these financial risks,they must identify their types and root causes,so as to effectively improve the success rate of M&A.In this paper,problem-oriented,case study method is adopted,and relevant theories such as principal-agent and information asymmetry are combined to carry out specific analysis on the continuous M&A process of Living beings Pharmaceutical under the relevant diversification strategy,and explore the types and causes of financial risks in the M&A process.First of all,through sorting out the process of Sentient Medicine’s continuous mergers and acquisitions from 2013 to 2021,the motivation of its continuous mergers and acquisitions was explored.Secondly,the Z-score model was used to evaluate the overall financial risks of Sentient Pharmaceuticals,and four kinds of financial risks existed in the process of continuous mergers and acquisitions were summarized,and the impact of these four kinds of risks on the business status and profitability of enterprises was explored by means of financial index analysis and other methods.Finally,relevant suggestions were put forward for Sentient Medicine to avoid these four financial risks reasonably and improve the success rate of subsequent mergers and acquisitions.By studying the financial risks of the continuous mergers and acquisitions of Sentient Pharmaceuticals under the relevant diversification strategy,this paper hopes to provide certain reference for similar enterprises in the pharmaceutical industry.