Pfizer Inc.'s (NYSE:PFE)
$68 billion acquisition of Wyeth (NYSE:WYE) and Merck & Co.'s (NYSE:MRK)
$41 billion bid for Schering Plough Corp. (NYSE:SGP) sparked fresh speculation on whether pharma megamergers create value and whether industry consolidation would continue. We've done our share of analysis. Recently, Baz Hiralal posted this
solid roundup of possible buyers and sellers among industry heavyweights, and Alex Lash reported on the
anti-megamerger attitudes of the chief executives of Eli Lilly and Co. (NYSE:LLY) and GlaxoSmithKline plc (NYSE:GSK).
A piece in Tuesday's Financial Times adds to the dialogue. In "
Pharma split on nature of mergers as kill or cure," the FT's Andrew Jack talks to a number of senior pharma executives including Novartis CEO Daniel Vasella and Pfizer's head of research Martin Mackay, who's working closely on the Wyeth integration.
It will come as no surprise to readers of Corporate Dealmaker that the executives agree that moving quickly to provide details on the new leadership team and organizational structure, and communicating early and often with employees are critical to a megamerger's success -- in any industry, for that matter. Consensus, however, was more difficult to come by on whether the megamerger is a worthy pursuit.
As noted above, GSK CEO Andrew Witty has been vocal that the disruption large acquisitions can create outweigh potential rewards. While Pfizer and Merck clearly believe that -- in this market and in this economy. at least -- the risks are worth it. And with pressure building to refill pipelines and diversify operations, it could be that other pharma giants may adopt a similar attitude.
- Suzanne Stevens
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Juergen Lasowski
And the winners are...
Lilly,
I'm surprised Eli Lilly is not listed as a possible "in play" target as the company has some serious pipeline issues.