I was reading about two non-profit hospitals (in the US) merging. Hospital A is large non-profit hospital which controls the market in its local metro area and it is acquiring Hospital B, a smaller hospital in a smaller metro area. Hospital B is part of a larger non-profit national hospital chain (call it Chain C).
Basically, Hospital B is being broken off of Chain C and it is being acquired by Hospital A.
It seems like a very capitalist like move, but there are no share holders to please, which got me thinking...
- What possible market motivations are there for Hospital A to acquire Hospital B?
- Likewise, what motivations would Chain C have for getting rid of Hospital B?