The future of M&A in the pharmaceutical industry: Promoting or stifling innovation?
Van Dyck, Walter Neels, Leo
Van Dyck, Walter
Neels, Leo
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Publication Type
Internet publication
Editor
Supervisor
Publication Year
2014
Journal
Finance Monthly
Book
Publication Volume
Publication Issue
June
Publication Begin page
26
Publication End page
27
Publication Number of pages
Collections
Abstract
In the research-intensive pharmaceutical industry, two rationales for M&A prevail. First, deals may be intended to provide access to target companies’ markets or innovative treatments R&D programs and, second, economies of scale could boost cost-efficiency. Both rationales lead to increased valuation of the merged company. The $119 billion takeover approach by Pfizer, the largest drug maker in the world, was resisted by AstraZeneca, another pharmaceutical giant and crown jewel of the UK-based life sciences industry at an offer representing a 45% premium over its share price before Pfizer made its move public. What went wrong and do we see a fundamental trend towards more or maybe different M&A activity in the pharmaceutical industry?
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Keywords
Healthcare, Pharmaceutical Industry