Abstract: Technical M&A is one of the important ways for enterprises to enhance their innovation ability, especially for the long-term development of pharmaceutical enterprises. This paper uses China's pharmaceutical listed companies with technical M&A from 2004 to 2015 as the testing sample, and examines the M&A performance and the difference caused by the main characteristics of technical M&A, namely the scale of technical knowledge and the nature of technical knowledge. The study shows that technical M&A has significant short-term influence on company performance and CAR (-10,10) is up to 4%, indicating that market has a positive response towards technical M&A. And also, technical M&A has a positive impact on the improvement of long-term financial performance of the company. Furthermore we characterize technical M&A by its knowledge. The larger the absolute size of the target company's technical knowledge, the smaller the difference between the two companies' technical knowledge relative size, and the higher the short-term and long-term performance of the host company. In terms of the nature of technical knowledge, relevant technical knowledge is more conducive for enterprises to exert synergistic effect and achieve better performance. Further research shows that private companies are more sensitive to technological characteristic variables, and the acquisition of cash payment method deepens the positive impact of the absolute scale and the nature of technical knowledge on the company's performance.

Key words: technical M&A, technical M&A characteristics, the scale of technical knowledge, the nature of technical knowledge, performance