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Merger and acquisition process can be a complex game

Mergers and acquisitions occur for numerous reasons, but in most cases, the goal of a business merger is to benefit both companies involved. Even so, some companies in New York and elsewhere are less than enthusiastic about a merger or business acquisition, no matter how tempting the offer. There are many valid reasons for this – employees may resent new management or fear that the action will lead to layoffs or a change in the company climate. Executives in the boards of directors may find their positions terminated or reassigned. Company owners may also worry that the change will spook investors or deter customers.

A recent attempt to merge two health care companies may illustrate a common response by company executives. The outpatient management company AmSurg Corporation met with executives from TeamHealth Holdings, with the goal of expanding AmSurg’s physician-outsourcing services. Despite a $7.8 billion offer in stock and cash, TeamHealth’s president and chief executive rebutted that the offer was too low and the company was well able to continue its growth independently.

Previously, TeamHealth had acquired IPC Healthcare in a $1.6 billion deal, and the company’s current efforts are focused on integrating the short-term care provider. AmSurg’s chief executive posed its own recent integration with Sheridan Healthcare as an example as to why a merger with TeamHealth would be mutually beneficial. In fact, the executive strongly urged TeamHealth that delaying the merger could be detrimental to the smaller company. Nevertheless, TeamHealth’s stock rose by 19 percent after the letters were made public.

This example reveals the complex intricacies of corporate strategy. A business attorney may assist in advising companies of the best actions to take.

Source: The New York Times, "AmSurg Seeks Merger, but TeamHealth Demurs," Oct. 20, 2015

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