Effect of Healthcare M&A Announcements on Acquiring Firm's Share Price

Abstract

The United States and global healthcare sectors comprise an enormous share of both the global market capitalization and global GDP. This demand for healthcare is still rapidly increasing with an aging and ever-growing population. To address this growing demand, healthcare companies have deployed capital into both organic and inorganic growth. This study investigates the effects of M&A and consolidation on the market capitalization of a variety of different healthcare industries both in the short-term and long-term. The results of this study vary by industry and time period, but there is a trend towards a positive capital markets response in the long-term within industries of low R&D intensity.