Mergers and acquisitions in Western European health care: Exploring the role of financial services organizations

Federica Angeli*, Hans Maarse

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Recent policy developments in Western European health care - for example in the Netherlands - aim to enhance efficiency and curb public expenditures by strengthening the role of private sector. Mergers and acquisitions (M&As) play an important role in this respect. This article presents an analysis of 1606 acquisition deals targeting health care provider organizations in Western Europe between 1990 and 2009. We particularly investigate the role of financial services organisations as acquirers. Our analysis highlights (a) a rise of M&As in Western Europe since 2000, (b) an increase of M&As with financial service organisations acting as acquirer in absolute terms, and (c) a dominant role of the latter type of M&As in cross-border deals. To explain these developments, we make a distinction between an integration and a diversification rationale for M&As and we argue that the deals with financial services organisations in the role of acquirer are driven by a diversification rationale. We then provide arguments why health care, from the acquirer's perspective, can be considered as an interesting target in a diversification strategy and we advance reasons why health care providers may welcome this development.

Although caution in drawing conclusions is needed, our findings suggest a penetration of private capital into health care provision that may be interpreted as a specific form of privatisation. Furthermore, they point to a rising internationalisation of health care. Both findings may entail far-reaching implications for health care, as they may induce both cultural privatisation and cultural internationalisation. (C) 2012 Elsevier Ireland Ltd. All rights reserved.

Original languageEnglish
Pages (from-to)265-272
Number of pages8
JournalHealth Policy
Volume105
Issue number2-3
DOIs
Publication statusPublished - May 2012
Externally publishedYes

Keywords

  • Mergers and acquisitions (M&As)
  • Health care providers
  • Western Europe
  • Diversification
  • Internationalisation
  • Privatisation
  • VERTICAL INTEGRATION
  • FIRMS
  • PERFORMANCE
  • INNOVATION
  • DIVERSIFICATION
  • RELATEDNESS
  • BENEFITS

Cite this

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title = "Mergers and acquisitions in Western European health care: Exploring the role of financial services organizations",
abstract = "Recent policy developments in Western European health care - for example in the Netherlands - aim to enhance efficiency and curb public expenditures by strengthening the role of private sector. Mergers and acquisitions (M&As) play an important role in this respect. This article presents an analysis of 1606 acquisition deals targeting health care provider organizations in Western Europe between 1990 and 2009. We particularly investigate the role of financial services organisations as acquirers. Our analysis highlights (a) a rise of M&As in Western Europe since 2000, (b) an increase of M&As with financial service organisations acting as acquirer in absolute terms, and (c) a dominant role of the latter type of M&As in cross-border deals. To explain these developments, we make a distinction between an integration and a diversification rationale for M&As and we argue that the deals with financial services organisations in the role of acquirer are driven by a diversification rationale. We then provide arguments why health care, from the acquirer's perspective, can be considered as an interesting target in a diversification strategy and we advance reasons why health care providers may welcome this development.Although caution in drawing conclusions is needed, our findings suggest a penetration of private capital into health care provision that may be interpreted as a specific form of privatisation. Furthermore, they point to a rising internationalisation of health care. Both findings may entail far-reaching implications for health care, as they may induce both cultural privatisation and cultural internationalisation. (C) 2012 Elsevier Ireland Ltd. All rights reserved.",
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author = "Federica Angeli and Hans Maarse",
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Mergers and acquisitions in Western European health care : Exploring the role of financial services organizations. / Angeli, Federica; Maarse, Hans.

In: Health Policy, Vol. 105, No. 2-3, 05.2012, p. 265-272.

Research output: Contribution to journalArticleScientificpeer-review

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T1 - Mergers and acquisitions in Western European health care

T2 - Exploring the role of financial services organizations

AU - Angeli, Federica

AU - Maarse, Hans

PY - 2012/5

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N2 - Recent policy developments in Western European health care - for example in the Netherlands - aim to enhance efficiency and curb public expenditures by strengthening the role of private sector. Mergers and acquisitions (M&As) play an important role in this respect. This article presents an analysis of 1606 acquisition deals targeting health care provider organizations in Western Europe between 1990 and 2009. We particularly investigate the role of financial services organisations as acquirers. Our analysis highlights (a) a rise of M&As in Western Europe since 2000, (b) an increase of M&As with financial service organisations acting as acquirer in absolute terms, and (c) a dominant role of the latter type of M&As in cross-border deals. To explain these developments, we make a distinction between an integration and a diversification rationale for M&As and we argue that the deals with financial services organisations in the role of acquirer are driven by a diversification rationale. We then provide arguments why health care, from the acquirer's perspective, can be considered as an interesting target in a diversification strategy and we advance reasons why health care providers may welcome this development.Although caution in drawing conclusions is needed, our findings suggest a penetration of private capital into health care provision that may be interpreted as a specific form of privatisation. Furthermore, they point to a rising internationalisation of health care. Both findings may entail far-reaching implications for health care, as they may induce both cultural privatisation and cultural internationalisation. (C) 2012 Elsevier Ireland Ltd. All rights reserved.

AB - Recent policy developments in Western European health care - for example in the Netherlands - aim to enhance efficiency and curb public expenditures by strengthening the role of private sector. Mergers and acquisitions (M&As) play an important role in this respect. This article presents an analysis of 1606 acquisition deals targeting health care provider organizations in Western Europe between 1990 and 2009. We particularly investigate the role of financial services organisations as acquirers. Our analysis highlights (a) a rise of M&As in Western Europe since 2000, (b) an increase of M&As with financial service organisations acting as acquirer in absolute terms, and (c) a dominant role of the latter type of M&As in cross-border deals. To explain these developments, we make a distinction between an integration and a diversification rationale for M&As and we argue that the deals with financial services organisations in the role of acquirer are driven by a diversification rationale. We then provide arguments why health care, from the acquirer's perspective, can be considered as an interesting target in a diversification strategy and we advance reasons why health care providers may welcome this development.Although caution in drawing conclusions is needed, our findings suggest a penetration of private capital into health care provision that may be interpreted as a specific form of privatisation. Furthermore, they point to a rising internationalisation of health care. Both findings may entail far-reaching implications for health care, as they may induce both cultural privatisation and cultural internationalisation. (C) 2012 Elsevier Ireland Ltd. All rights reserved.

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KW - Diversification

KW - Internationalisation

KW - Privatisation

KW - VERTICAL INTEGRATION

KW - FIRMS

KW - PERFORMANCE

KW - INNOVATION

KW - DIVERSIFICATION

KW - RELATEDNESS

KW - BENEFITS

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JO - Health Policy

JF - Health Policy

SN - 0168-8510

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ER -