In many cases, business owners do not envision selling their ideas and hard work to another company. However, sometimes the market changes, making mergers and acquisitions (M&A) extremely profitable options for companies looking to increase their collective value.
While M&A can take a long time to complete, the November 2018 $69 billion deal between CVS and Aetna may serve as an example of the options you might have as your business grows. Depending on your end goal, a similar deal may serve you well.
Why did CVS merge with Aetna?
Healthcare is of one of the largest industries worldwide. With the lofty goals of decreasing costs, simplifying how customers receive care and localizing access for those with health-related concerns, the potential of the new healthcare model may not surprise you.
However, it can take time for the market to fully recognize the full effects mergers can have on an industry. Previously, CVS anticipated their stock to increase by $6.68 to $6.88 per share this year but is now turning the corner to expected dividends between $6.75 and $6.90 per share.
And as CVS heads toward a bullish trend, you might wonder how the largest acquisition in the company’s history compares to their previous acquisitions.
Other companies CVS has acquired
With 16 acquisitions completed, CVS has a wide breadth of influence in the healthcare field. Along with Aetna, some of the companies acquired by CVS include:
- Universal American – Medicare Part D Business, closed in 2010 for $1.3 billion
- TargetPharmacy, involving $1.9 billion in 2015
- Longs Drug Stores, acquired in 2008 for $2.9 billion
- Omnicare, encompassing $12.9 billion in 2015
Whether you are just starting out or have already developed some strategic partnerships, keep an open mind about M&A. Just because there may not be any billion-dollar deals on the table for you at this point does not mean that you cannot position yourself to close lucrative deals in the years to come.