A few years a friend of mine in health care had just been hired by an insurance

Question

A few years a friend of mine in health care had just been hired by an insurance company, Insurance of North America (INA) as middle management. INA had just acquired a managed health care company in southern California and needed people like her who had some experience in this new and growing field. Within a few weeks they acquired a 2ndmanaged care company and our task was to merge the two companies into one operating unit. Some of the problems we faced were:

A parent company without any knowledge or experience of managed health care.

One acquired company was non-union; the 2nd company was fully unionized.

The 1st company had few bricks and mortar but many contracts with providers to provide health care to its members. The 2nd company had lots of bricks and mortar (clinics & hospitals) and had few outside contracts.

To make the situation more difficult INA decided to merge with a second large insurance company, Connecticut General (CG). The name of the new company = CIGNA. Today CIGNA is one of the largest and best managed health care companies in the US.

So now they were struggling with two very different acquisitions and one large merger. Difficult to say the least! Without going into full detail (and several pages) the first action the newly company did was to hire a CEO for their health care division from the outside. Our BOD was composed of senior management from both INA & CG. The new CEO wisely chose 2 top managers from each acquired company to be top executives in the new health care company. Other challenges were trying to form the right management team. So ”Creating a new and effective top-management team” was the first priority and in retrospect was the best course of action. While they struggled for 2 – 3 years, it all came together and CIGNA the health care giant came into being.

Incidentally, many of them in middle management and senior management have stayed in contact and the large majority went on to rewarding and successful careers in the managed health care field. Most have served in the capacity of CEO for other companies.

Describe a merger or acquisition experiences you went through from your work/career? What happened? Elaborate and explain

Explanation / Answer

The merger of automobiles company with the leading spare parts company would make a good merging business. It would create more opporturnities to utilise advanced technology with the automobiles in order to attain a successful product. It would increase the demand and supply of the product. The advancement in technology and its correct method in the application of its making helps to increase the market value. The trade of the products to the other parts of the world helps to increase the revenues. It increases the opporturnities of the merged firm to open up new set up and location of manufacturing firm in different parts of the world so that business expansion increases the revenues of the company. It proved to be successful due to balance and coordination in trade and business ventures.

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