Mergers and Acquisitions in the German Hospital Market – Who are the Targets?

Adam Pilny

No 518, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Since the introduction of the DRG system in 2004, the German hospital market experienced a stream of consolidations in terms of mergers and acquisitions, resulting in a decreasing number of hospital owners. In this study, I examine the ex-ante characteristics of hospitals prior to a merger or an acquisition occurring between 2005 and 2010 in Germany, predominantly focusing on the financial conditions of hospitals. The results reveal that hospitals with a higher probability of default and less liquid resources are more often the targets of acquisitions. On the other hand, hospitals with a lower equity-to-assets ratio exhibit a higher probability of merger. This pattern can be explained by different motives and rationales of hospital chains and potential investors.

Keywords: hospital market; mergers; acquisitions; consolidation (search for similar items in EconPapers)
JEL-codes: I11 L33 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-com and nep-hea
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:518

DOI: 10.4419/86788593

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