The Risk of Cross-border Mergers and Acquisitions of China’s Medical Industry

  • With the development of economy and technology, China with the increasing number of elderly people has become one of the countries with a relatively high degree of aging population in the world. The demand for health care has increased, because of the increasing prevalence of chronic diseases of elderly. At the same time, the rising of China's per capital disposable income, the increasing of the demand for national health management, and ascending of the total expenditure on medical and health care of Chinese residents have led to an increase in consumer demand in China's medical industry. China has listed the medical industry as the strategic emerging industry with vigorous support, introducing a series of policies to encourage the rapid development of the medical industry. The number and the scale of medical companies in China is increasing and expanding. However, due to the lately start, the lack of core technology and innovative capabilities, China's medical companies are concentrating in the low-end market and facing fierce competition. Many companies have encountered bottlenecks and many of them are trying to seek development opportunities through M&A. In recent years, the frequent M&A in China's domestic medical market results in the decreasing in the number of domestic high-quality tenders and the increasing in valuation prices. Many medical companies have begun to turn to international markets for cross-border M&A. While expanding overseas markets and increasing global market share, companies can also quickly acquire relevant technologies, accelerate research and development, and enrich product types and industrial chains. Due to the weakly overall strength of China's medical companies, and the shortly history of cross-border M&A, China’s company’s experience in internationalization is insufficient. And the risks faced by China’s medical companies in cross-border M&A it relatively high. Therefore, in the whole process of medical companies' cross-border M&A activities, it is crucial to identify risk points in a timely manner and taking effective risk aversion measures accordingly. This paper selects the case of cross-border M&A in China’s medical industry--Bluesail Medical's acquisition of Biosensors to study the motivation of cross-border M&A of China’s medical companies and the risks and related risk response measures at various stages of cross-border M&A. First of all, this paper reviews scholars' research on M&A-related issues from the aspects of M&A motivations, causes of M&A risk, and medical industry M&A. Subsequently, this paper makes an analysis of the causes and risks of cross-border M&A in China's medical industry. Then, this paper takes Bluesail Medical’s acquisition of Biosensors as the case study, and analyzes several motives of the M&A of Bluesail Medical. In addition, the risk of this cross-border M&A of Bluesail Medical was identified and its countermeasures were analyzed and evaluated from three stages: pre-M&A, M&A process and post-M&A. In this study, it is found that Bluesail Medical’s M&A has the following risks: decision-making risk, valuation risk, payment risk, financing risk, financial integration risk and human resource Integration risk. In the last part, this paper summarizes the case analysis and puts forward suggestions on the risk response of cross-border M&A of China’s medical companies, hoping to provide references for the risk identification and response of related M&A of China’s medical companies in the future.

Download full text files

  • Yan,Shuhui_MA_2019.pdf
    eng

Export metadata

Additional Services

Share in Twitter Search Google Scholar Statistics
Metadaten
Author:Shuhui Yan
URN:urn:nbn:de:kobv:b721-opus4-22889
Referee:Jochen Breinlinger-O'Reilly
Advisor:Shaobing Peng
Document Type:Master's Thesis
Language:English
Year of Completion:2019
Date of first Publication:2020/08/10
Publishing Institution:Hochschulbibliothek HWR Berlin
Granting Institution:Hochschule für Wirtschaft und Recht Berlin
Date of final exam:2019/07/15
Release Date:2020/08/10
Tag:Cross-border M&A; Medical industry; Risks of M&A
Page Number:64
Institutes:Berlin Professional School (BPS) / Chinese-European Economics Business Studies M.A. (CEEBS)
Licence (German):License LogoUrheberrechtsschutz