The Main Drivers of M&A : Evidence from Swiss Acquirers

This paper investigates the Swiss M&A trend and the main underlying drivers of Swiss acquirers in the Financial Services (FS) and Healthcare & Life Sciences (H&LS) industries during the period 2006-2010. It also attempts to analyze Switzerland's current M&A environment, and assess how new potential challenges could impact the M&A activity of these two segments in the coming years. In the FS industry, results show that insurers' acquisition strategy generally aims at diversifying their current portfolio in order to gain market share, become leading global insurance providers and reduce risks attached to their past product range. With regards to banks, they generally follow the market trend. Consequently, product line and market share expansions were the primary motives of M&A before the most recent financial crisis while regulatory compliance became their new underlying drivers after the crisis. On its side, the Swiss M&A in the H&LS sector is highly driven by large pharmaceutical companies which aim at diversifying their product portfolio in view of blockbuster products losing their patent protection in order to deal with price pressure as a result of deteriorating public finances. Consequently, more emphasis was given to generic targets companies, small biotech companies providing new technologies and targets specialized in niche products. In the coming years, insurers will certainly keep their desire to expand themselves and become global leader providers whereas banks will still adapt their M&A activity to the economic trends and the new and increasingly strict regulatory environment. The H&LS industry will pursue its current portfolio diversification, with a trend towards personalized medicine and a special attention given to increasing government regulations