Cvs Pharmacy Merger Case Study

CVS is a corporation. A corporation is one of the most known business structures. Corporations can merge or acquire other businesses as an attempt to raise capital by reaching different markets and expanding the company. On Dec. 16, 2015 CVS declared its acquisition of targets pharmacy for around one point nine billion dollars. This deal was made so a CVS pharmacy would take place of every target pharmacy. This is an excellent example of how the corporations use acquiring other companies to broaden the corporation. This deal had a vast impact on CVS. Conforming to Mr. Trevors article, “CVS Earnings: Strong Performance Driven by Acquisitions and Growth In Specialty Business”, Mr.Trevor states “The acquisition of Target’s more than 1,600 pharmacy departments and 80 medical clinics makes CVS’ network of pharmacies the largest among its competitors. (Trevor, 2016, para. 5)” CVS taking targets 1,600 pharmacy departments and 80 medical clinics differentiates this company from its competitors because it is the largest pharmacy company. In addition with merging and acquisitions corporations is known for its effective advantages which including the selling of shares, its limit in liability and marketing power. When a company decides to sell shares a new pool of money is now
Disadvantages like double taxation and a lot of tax forms. Double taxation is when the corporation gets taxed twice because first the company’s profits gets taxed and then the company’s shareholders get taxed. In agreement with the article “C Corporations: Learn the 11 Advantages & Disadvantages” double taxation is a disadvantage to a corporation because the company’s shareholders earnings they receive from the company will show up on their tax returns; resulting in paying taxes again (“C Corporations: 11 Advantages & Disadvantages”, 2016). All the taxes that must be paid for will require a lot of paperwork which is another