Six Trends in Pharmaceutical Mergers and Diversification of Use of Financial Instruments
All kinds of unfavorable factors make the valuation of pharmaceutical companies relatively low. If merger and acquisition integration is carried out now, it will be the best golden period; as the capital market matures, more and more new financial instruments will be used in the merger and acquisition of the pharmaceutical industry. ......
First, ushering in the golden period of mergers and acquisitions Although mergers and acquisitions in the pharmaceutical industry have risen one after another in recent years, there have been dozens of mergers and acquisitions of listed companies every year. However, throughout the entire pharmaceutical industry, the number of SMEs is still too much. At present, there are nearly 5,000 pharmaceutical manufacturing companies in China, with most of them having annual sales of less than 100 million yuan. There are more than 7,000 medical and pharmaceutical companies, most of them are small companies, and there are more than 1,000 pharmaceutical retail chain companies, but their sales scale. Not large, the number of stores is not much.
Under this industry structure, mergers and acquisitions and integration will be one of the important roads for enhancing the competitiveness of enterprises in the Chinese pharmaceutical industry. Through mergers and acquisitions integration, those pharmaceutical companies with certain characteristics but not large in size will be aggregated; some small and medium-sized companies with no characteristics will be eliminated; and several strong pharmaceuticals with genuine competitiveness will be created in China.
In the past, many pharmaceutical companies had relatively traditional ideas, relatively old ideas, and insufficient financial strength. These factors have affected the pace of consolidation in the pharmaceutical industry.
With the formation of market concepts, the entry of funds, and the attention of professionals and organizations, mergers and acquisitions in the pharmaceutical industry will usher in the next peak period.
The current pharmaceutical industry is in such a period: The government strictly supervises the pharmaceutical enterprises; the call for price cuts is higher than a wave; the competition in the industry is in a white-hot state; the profitability is extremely low. This kind of unfavorable factors make the valuation of pharmaceutical companies relatively low. If merger and acquisition are carried out now, it will be the best golden period.
Second, a variety of capital forces will start wrestling With China's accession to the WTO and the full liberalization of the Chinese market, more foreign capital will enter the domestic market. The pharmaceutical market in China is growing rapidly. China's pharmaceutical consumption is increasing year by year. In the near future, the Chinese pharmaceutical market will become a big cake in the world that cannot be ignored. The growth rate of the pharmaceutical market in Europe, the United States, Japan, and other developed countries has slowed down. The development of pharmaceutical joint ventures in China for so many years has increased the confidence of those foreign investors who have not entered and wait and see. In the coming years, more foreign capital will enter China. One of the means to enter is the acquisition of domestic pharmaceutical companies, which is a quick way to integrate into the Chinese market.
After decades of reform and opening up, private capital has become even more powerful. Private capital that has entered the pharmaceutical industry will continue to lift its banner of expansion, using its rich experience and careful thinking to devour some of their prey. The best way to enter the pharmaceutical industry without private capital entering the pharmaceutical industry is acquisition.
State-owned enterprises will absolutely not give up medicine as a "fat" that many local governments regard as a pillar industry. They will use the advantages of the policies, the advantages of the background, the advantages of the relationship to conduct crazy mergers and acquisitions integration, because they also realize that it is now a good time for mergers and acquisitions.
The “China†prefix of the China Resources Department, the Department of Chinese Medicine, the “people†prefix in the Fosun System, and the Dongsheng System will increasingly reflect the Group’s strength. The participation of multiple capitals will make the pharmaceutical industry more colorful.
Third, the new capital means will widely use the pharmaceutical industry in the capital market has always been considered a more conservative industry.
However, as the capital market matures and the M&A market matures, more and more new financial instruments will be used in the merger and acquisition of the pharmaceutical industry.
For example, licensing. In the past, most of the mergers and acquisitions in the pharmaceutical industry were agreement acquisitions, and there were few licensed acquisitions in the secondary market. With the advancement of the share-trading reform and the full circulation of pharmaceutical-listed companies, the licensing of acquisitions will become more and more many.
Another example is the parent company's privatization of subsidiaries. In the past, pharmaceutical listed companies often had a group company as the parent company. They all packaged a piece of high-quality assets and listed them. However, now they all have group companies that want to go public as a whole, so the parent company's privatization of subsidiaries becomes an important way.
In terms of payment methods, in the past mergers and acquisitions in the pharmaceutical industry, cash payment methods were generally adopted, and asset replacements, debt-taking acquisitions, and leveraged buyouts were rarely seen. In future mergers and acquisitions, these payment methods will be more use.
Fourth, overseas mergers and acquisitions are more in-depth As China's pharmaceutical industry has a large gap in many respects compared with developed countries, management, capital, product research and development, quality control, and marketing capabilities have all clearly fallen behind the drugs of developed countries. Enterprise.
However, during these years of development, many Chinese pharmaceutical companies have rapidly increased their capabilities and have established unique advantages in R&D, marketing, and production, and their financial strength has been continuously strengthened. Therefore, they can, to some extent, match with foreign pharmaceutical companies. Conduct some competition.
In terms of APIs, China is now the largest exporter of APIs and has absolute advantages in scale. We can develop our own bases abroad and go abroad through mergers and acquisitions.
In terms of biopharmaceutical research and development, biomedical R&D companies are often not large-scale, and the funds required for mergers and acquisitions are not too large. Some powerful domestic pharmaceutical companies can obtain their new products through mergers and acquisitions with these foreign biopharmaceutical R&D companies. Marketing rights, access to its more advanced research and development capabilities, to make up for the lack of their own R & D strength.
In the production and marketing of generic drugs, after many years of development, many pharmaceutical companies in China have achieved world-leading productivity. We can acquire overseas general drug manufacturers and obtain their production capabilities while obtaining their overseas production. The marketing network and resources exploit the cost advantage to open up the foreign pharmaceutical market.
Home appliance industry, steel industry, and auto industry have all seen cases of overseas mergers and acquisitions by Chinese companies. In the coming years, domestic pharmaceutical companies will also go abroad through mergers and acquisitions.
V. Maintaining the trend of dynamic development M&A integration in the Chinese pharmaceutical industry cannot be completed in one round. This will be a dynamic and recurrent process. If we say that the pharmaceutical industry is now in the "Spring and Autumn Period," then through rounds of mergers and acquisitions, the Warring States period will eventually emerge. The emergence of oligopolists marks the maturity of an industry's marketization.
Today's mergers and acquisitions may become mergers and acquisitions in the future, and current mergers and acquisitions may also become mergers and acquisitions.
Huayuan was a merger and acquisitionist in the past few years and was crazy about mergers and acquisitions. However, it has now become something of a Huarun asset. In the early years of the 30th, it was also a time when it was faced with restructuring.
6. More intermediate organizations will play an important role in mergers and acquisitions integration of China's pharmaceutical industry through intermediary agencies.
M&A is a complex system project. Pharmaceutical companies have their expertise in R&D, manufacturing, and marketing. However, there is no doubt that mergers and acquisitions do not have very professional skills. If you blindly pursue self-fulfillment, you can only limit your own development. .
In mergers and acquisitions, companies need legal experts, financial experts, financial experts and other professionals, and intermediary agencies will provide a full range of services in these areas.
Only through these third-party service providers, pharmaceutical companies can perform mergers and acquisitions and integration with ease.
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