Understanding Merger & Acquisition with Respect to Health Service Industry

Understanding Merger & Acquisition with Respect to Health Service Industry

Introduction

Mergers and acquisitions or takeovers and corporate structuring are a part of business corporate strategy. Mergers and acquisitions are aimed at combining two companies to form larger ones. A merger is distinguished from the an acquisition by the fact that a merger means combination of two entities in a way that a new resultant entity is formed while in an acquisition one entity acquires the other and the acquired entity no longer remains operative and the acquirer company swallows the business and the buyer shares continue to be traded (Berenson, A. (2004)).

Mergers and acquisitions occur for many different reasons, it involves companies stuck in different circumstances and can be initiated by either of the two, the one which wants to be taken over or the one looking to strengthen or expand its financials by taking the other company. In today world, most businesses enjoy freedom in global markets. Those freedoms come from trading activities, ways of operations, and competitive pricing strategies. Consumers are benefits from great services and pricing from those fair competitors. But now, with the downstream of economic, big companies in different industries plan to merge together or acquire smaller companies to extend business financial. The concerns arise is whether those mergers and acquisitions will benefits society and consumers after the transaction take place. There are different opinions come from people who agree or oppose it (Weston, (2002)).

Everyone can see what benefits that mergers and acquisition can bring to companies. In many situations, when those companies can no longer find a way to be survived, merger or acquisition is the best business strategy. Some of the mergers and acquisitions have proved in corporation with activities in several spheres of commercial enterprise; others have produced multinational organizations with operations in many countries (Ravid, S.A., Kedia, S., & Pons, V. (2011)).

In this report we are going to evaluate Merger and acquisition activities with respect to health service industry.

Discussion

Mergers and acquisitions are one of the fundamental and the prominent strategies of today's business. It is considered as the most important aspect of today's finance world. It is observed that, large number of organizations is trying to merge their businesses in order to make their business more stable.

1. Key Financial Drivers behind M & A Activities

The last 20 years have been huge for the increase in mergers and acquisitions in the history of the entire world. These mergers and acquisitions have led towards changes in the organizations and their control over the economic activities. Europe has been the most interesting market for analyzing the impact of mergers and acquisitions in particularly the health service industry. There are many reasons due to which the number of mergers and acquisitions especially in the health service industry have got further rise like globalization of products and services, transformation of the media, de-regularization and privatization of companies, incentives provided by financial and capital markets so that ...