Pharmaceutical Companies Mergers and Acquisitions into Explosions Half-Year Amount Exceeds 7 billion


Release time:

2017-07-13

Recently, the 2016 China Pharmaceutical Industry Top 100 List was announced. Some experts analyzed that the top 100 companies have become the main force in pharmaceutical manufacturing.

It is reported that there are 5500 pharmaceutical industry manufacturers in China, less than 2% of which are large scale enterprises, generating nearly 1/4 of industrial sales revenue (26.9 per cent) and profits (24.85 per cent). The number of pharmaceutical companies that account for 82% of the sales scale is below 0.5 billion yuan, and their sales revenue accounts for only 1/4 of the pharmaceutical industry.

In recent years, the entry threshold for China's top 100 enterprises has been gradually raised. After the statistical caliber was unified to include only domestic enterprises in 2013, the entry threshold for the top 100 enterprises rose from 0.932 billion yuan at that time to 1.46 billion yuan at present. This is inseparable from the continuous mergers and acquisitions and expansion of enterprises. For example, 82 of the top 100 enterprises in 2016 are listed companies, and 1322 subsidiaries are included in the scope of merger, with an average of more than 16 subsidiaries of each enterprise, which shows the strength of capital merger and acquisition integration.

According to the data disclosed by Qingke Group's investment community and other online channels, there were more than 30 mergers and acquisitions in the pharmaceutical industry from January to June this year, involving more than 7 billion.

According to the analysis of industry insiders, there is a new trend in mergers and acquisitions in the pharmaceutical industry, and cross-border mergers and acquisitions have increased, especially some real estate industrial companies cross-border mergers and acquisitions of pharmaceutical companies in the case of increased real estate regulation and control, in order to bring new growth points for enterprises. There are two cross-border mergers and acquisitions that have been made public through the investment community alone: Xinhe Industrial's acquisition of Dacheng Medical, and Sansheng's acquisition of Chunrui Pharmaceuticals. In fact, there are many such cross-border non-public mergers and acquisitions. No wonder, China's commercial real estate leader Wanda to invest in more than 100 billion development of medical undertakings.

Why do pharmaceutical companies continue to be hot mergers and acquisitions?

As China's pharmaceutical regulatory policy is becoming more and more stringent, medical insurance control fees, "drug proportion" restrictions, "two-vote system" implementation will accelerate the industry reshuffle, small pharmaceutical companies increasingly difficult to survive. These companies are often easy targets for mergers and acquisitions. For pharmaceutical companies that want to initiate mergers and acquisitions, through acquisitions, they can expand their product lines, obtain high-quality channels, expand their business scale, improve industry competitiveness, and quickly enter new markets.

The era of marketing in China's pharmaceutical industry is gradually fading away, and corporate marketing strategies are becoming more and more homogeneous, and superior products have become the key to differentiated competition. A considerable number of leading pharmaceutical enterprises are facing the old products into the growth platform period, and the research and development strength is not enough to support the continuous supply of new products. For most of the listed pharmaceutical companies with relatively strong capital strength, acquiring high-quality varieties through mergers and acquisitions has become the preferred measure.

At present, a considerable number of large-scale pharmaceutical companies in China's pharmaceutical industry are business types with low thresholds such as generic drugs, OTC, and generic chemical drugs. And some emerging R & D pharmaceutical companies hold individual good varieties, often become the scale of enterprises coveted M & A target of choice. Through mergers and acquisitions, capital operation to achieve resource acquisition, can greatly reduce the time investment and risk-taking, for the enterprise to bring excess returns. (Liu Qian Comprehensive)