On 26th January 2009, Pfizer announced plans to acquire Wyeth for $68 billion. Pfizer’s CEO, Jeffrey B Kindler, insisted the deal would be different from the company’s earlier mega-deals involving the acquisitions of Pharmacia (2002) and Warner-Lambert (2000) - the acquisition of Wyeth would provide a broad and diversified portfolio, rather than been focused on a single product or cost-cutting. Pfizer’s strategy of growing its portfolio through a mega M&A deals follows the 2008 acquisitions of Millennium by Takeda and ImClone by Eli Lilly.
These major deals are likely to result in two alternative industry responses:
a wave of consolidation involving further mega-deals;
the emergence of independent players that continue to build their portfolios through internal development, licensing and smaller scale acquisitions.
Leading pharmaceutical and biotechnology companies must decide how best to respond Pfizer’s proposition that ‘size matters’. Those that choose to consolidate will have to identify the best prospects, consolidate portfolios and execute synergy cost savings. Those that choose not to embark down the mega-deal path will still have to adapt to a more consolidated world in which broad, diverse portfolios and an efficient cost base or a minimum requirement to compete.
Report Purpose
Mergers and Acquisitions in the Pharmaceuticals Sector, 2009 - Critical success factors for competing in a consolidating market from URCH Publishing, explores the merits of the mega-deal in contrast to a more measured portfolio growth strategy and highlights the key opportunities and challenges presented by both business models. A detailed assessment of recent deals will identify the key issues and success factors, while the future M&A strategies of the leading pharmaceutical and biotechnology companies will also be assessed. Finally, the impact of consolidation in the industry will evaluated both at the organizational and therapeutic market level. All companies, big and small will be affected by the shake-up. This report will help to understand the key opportunities and challenges that lie ahead in order to formulate a robust response to a changing competitive landscape.
Some key findings from the report
Significant industry consolidation will lead to a fundamental shift in the market dynamics across all major product categories.
Since the beginning of 2006 a total of seven deals have been agreed with total transaction fees in excess of US$10 billion.
It appears likely that the mega-M&A wave started by the 3 deals in Q109 is not yet finished.
A handful of major players will follow in the footsteps of Pfizer and enter into major M&A transactions involving a significant step change in market shares and industry consolidation.
Reasons to buy this report
Understand the M&A environment in the pharmaceuticals industry.
Be informed about likely mergers and analyse companies that could be acquired in the near future
Assess the success factors that underlie a successful acquisition and review those which have delivered long-term shareholder value.
Draw on advice to manage your company to compete in an increasingly consolidated marketplace.
Gain insight into how drug portfolios are managed in an M&A situation and best value is extracted.
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