Mergers, Acquisitions and Takeovers Case Study

Pfizer : Mergers and Acquisitions

Abstract:
In the 1990s, the global pharmaceutical industry saw a spurt of mergers and acquisitions. Companies across the world were merging to achieve critical mass and economies of scale in all departments but more specifically in research and development. Pfizer, which had always adopted a strategy of 'organic' growth, suddenly changed its policy and turned towards 'inorganic' growth. It acquired Warner Lambert and Pharmacia to become the biggest pharmaceutical company in the world. The major driver for these acquisitions was the portfolio of blockbuster drugs of the two acquired companies.

Pedagogical Objectives:

• To discuss why Pfizer changed its trajectory from organic to inorganic growth
• To discuss the key elements in Pfizer’s acquisition of the two companies.

Keywords :  Pfizer; Mergers and acquisitions; Warner Lambert; American pharmaceutical industry;Mergers, Acquisitions, Alliances Case Study ; Patented drugs; Lipitor; Pharmacia; Value chain; Celebrex; Research and development; Economies of scale; Food and Drug Administration; Co-promotions; Generic competition; Inorganic growth

Contents : 
Introduction
Background
Pfizer and Warner Lambert merger
Pfizer and Pharmacia merger
‘How big is too big?’
Merger cost Savings
Pharmaceutical Top Ten Deals in 2002
Number of All Deals
Alliances of Cooperation, License and/or Other Agreements with Pfizer
Mergers & Acquisitions vs Value Chain Improvement