Big Pharma Megamergers Bad for Management, Good for Shareholders
Pharmaceutical companies that have remained among the worldâ€™s top 20 largest have all gone through a megamerger with a $10+ billion target company between 1995 and 2005. That sounds like good news, and it isâ€”for the shareholders. On the flipside, such gargantuan couplings tend to wreak havoc on internal management systems, as well as organizational and critical programs; even research and development suffers. Itâ€™s because of this regularly negative outcome that most believe mergers within Big Pharma destroy value within the industry. McKinsey & Co. donâ€™t see it that way. In their analysis of 17 deals between 2005 and 2011, the internal disruption is warranted based on the long-term sustainability of the acquirers and positive returns for shareholders.