PHARMA M&A SPECIAL ....Top 10: The Highest Value Deals in Pharma

Top 10: The Highest Value Deals in Pharma

According to a study by the business consultants Ernst & Young, the pharma sector is in 2014 on the threshold of takeovers and fusions to the value of 265 billion dollars (205 billion euros).

Place 10 – Valeant/Allergan – 49 billion dollars (2014/outcome open): The Canadian pharma company wants to take over the US American Botox manufacturer Allergan for 49 billion dollars. The first takeover bid founders, however, on the veto of the Allergan management. Immediately afterwards, Valeant addresses the shareholders of Allergan with a public takeover bid. The first deadline, 15 August, passes without a conclusion. Only shareholders of 4% of the shares handled on the stock exchange are prepared to sell at this point in time. Valeant reacts by prolonging the deadline, under the same conditions, to the end of the year.

Place 9 – Abbvie/Shire – 54.7 billion dollars (2014/finalised): After long vacillation, the US American pharma company Abbvie takes over the British competitor Shire. Only after a total of five offers does the management of the Irish orphan drug specialists agree to sell to the US company. The takeover costs Abbvie 54.7 billion dollars.

Place 8 – Pfizer/Pharmacia – 60.7 billion dollars (2002/finalised): The US American pharma giant Pfizer, with three successful and one failed takeover, is by far the most active firm in this ranking. In 2002, Pfizer took over the Swedish competitor Pharmacia. The purchase price amounted to 60.7 billion dollars in shares. After the purchase, Pfizer held at that time 12 medicines with an annual turnover of more than billion dollars each.

Place 7: Sanofi/Aventis – 65.6 billion dollars (2004/finalised): The French pharma company Sanofi came into existence in 2004 through a fusion of Sanofi-Synthélabo and Aventis. In their turn, both companies originated from a fusion. As early as 1999, Sanofi and Synthélabo combined to form Sanofi-Synthélabo, and from Hoechst and Rhône-Poulenc Aventis emerged. These fusions were the coming together of equal partners, since the stock exchange value of both companies before the takeover was approximately the same. But it is curious that the hostile takeover bid came from Sanofi-Synthélabo, although Aventis had twice as large a turnover at this time. Until 2011, Sanofi continued to sign under the name of Sanofi-Aventis.

Place 6 – Abbott Laboratories/Abbott/Abbvie – 66.6 billion dollars (2013/finalised): The splitting up of Abbott Laboratories was no traditional takeover or fusion. On 1 January 2013, Abbott was divided into two mutually independent companies, Abbott and Abbvie. Abbott is a subsidiary of Abbott Laboratories and retains the business areas medical technology and generic production. To this end, Abbott Laboratories split off around 66.6 billion dollars of its capital in shares. The business areas special medicines and biotechnology, including the arthritis medicine Humira, went to Abbvie.

Place 5 – Pfizer/Wyeth – 68 billion dollars (2009/finalised): For 68 billion dollars, the US American pharma company Pfizer bought the US rival Wyeth. At the time of purchase, both companies were counted among the 10 largest pharma companies in the world. The takeover, however, was also the subject of negative headlines, since, according to media reports, between 13,000 and 20,000 jobs were to be lost. Pfizer lost its leading position as the biggest pharma company in the world in 2012 to the Swiss pharma company Novartis.

Place 4 – American Home Products/Warner-Lambert – 76 billion dollars (1999/failed): The fourth place among the biggest pharma deals goes to the first and only failed takeover in the Top 10. In 1999, the US firm American Home Products failed with a friendly takeover bid for Warner Lambert. This deal, long considered a certainty, was beaten in the final straight by a better hostile takeover bid from Pfizer (see Place 2 on the following page). American Home Products received at least a little comfort for the defeat from the penalty payment Of 1.8 billion dollars. American Home Products later operated under the new name Wyeth and was likewise taken over by Pfizer in 2009 (see Place 5).

Place 3 – Glaxo Wellcome/Smith Kline Beecham – 79 billion dollars (2000/finalised): For a total of 79 billion dollars, the two British pharma companies Glaxo Wellcome and Smith Kline Beecham fused at the beginning of the new millennium. The fusion was preceded by a comprehensive investigation by the competition authorities lasting 11 months.

Place 2 – Pfizer/Warner-Lambert – 89 billion dollars (1999/finalised): After a takeover battle lasting several months, Pfizer finally succeeded, in 1999, in taking over the US rival Warner-Lambert. 89 million dollars changed hands in the deal (on top of which came 1.8 billion dollars penalty payment to American Home Products), making it the fourth biggest takeover in history. Only Vodafone/Mannesmann, AOL/Time-Warner and MCI Worldcom/Sprint had cost more. Pfizer and Warner Lambert had already cooperated in a joint venture starting in 1996. The hostile takeover bid by American Home Products for Warner Lambert was seen by Pfizer as a threat to this cooperation; they in turn reacted with a hostile takeover bid.

Place 1 – Pfizer/Astra Zeneca – 118 billion dollars (2014/outcome open): At the beginning of 2014, Pfizer once again caused a stir with a record bid for the British competitor Astra Zeneca. For 99 billion dollars, the US Americans wanted to purchase the Brits. Astra Zeneca turned down not only this, but also two further offers of 106 and 118 billion dollars each. For Pfizer, a hostile takeover is not a viable option. According to British law, Pfizer now has to wait until the end of 2014. Only then can the Viagra manufacturer make a new offer for Astra Zeneca. Astra Zeneca explains its rejection with, on the one hand, a purchase price which is in their opinion too low and, on the other hand, fear of job losses in the United Kingdom.

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