Critical factors behind mergers and acquisitions in the EU healthcare logistic market

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Madeddu, Simona
Issue Date
MBA in Finance
Dublin Business School
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In the current dynamic business scenario, all organisations face the challenge of strategic development. The pressure to increase profits pushes firms to find the best way to grow and remain competitive. Of the two main strategic paths, organic and inorganic, the latter has become increasingly popular. M&A, in particular, is a type of inorganic growth strategy that appeals to many executives because of its immediate benefits. However, the validity of M&A as a profitable strategy and its capability to create value are heavily debated in the academic community as research shows clearly that many M&A deals end up in catastrophe. The objective of this study is to identify what are the main drivers that lead managers to engage in risky M&A activity despite the hard evidence and whether M&A is able to create value or not. The study, through in-depth interviews to relevant executives, focuses on the analysis of a case-study concerning the logistic industry and the growing business relationship with the healthcare industry. The increasing complexity of the latter has created new needs and new business opportunities, fostering intense M&A activity. The study examines what opportunities and challenges, present and future, characterise this sector and how this interplay will grow further. As an exploratory study, this thesis aims to provide a contribution to build knowledge in a grey and highly debated area and shed some light on the M&A paradox, offering significant insights from inside the industry. The study shows that risks are assessed carefully before choosing the strategy and much depends on the circumstances. Interestingly, financial profit is not the main driver, and operational synergy assumes a leading role as main motivation. Further research is suggested into a business area that is only destined to grow and attract more interest as the technological and medical progress will advance. Author keywords: M&A, merger, acquisitions, logistics, healthcare, F&L, growth strategy, corporate strategy