Tuesday, March 10, 2009

M&A ~ Didn't see this one coming

Wow, I don't follow the M&A and Private Equity too closely, but I couldn't ignore this once I read it. I mean I knew Merck was huge! But I would never dream that they would try and outright buy a company like SGP. I am surprised at the amount of M&A coming from the Pharma industry despite the worlds "economic woes," Last time I remember the Pharma industry wasn't exactly booming, looks like someones been keeping cash under a mattress...

Well I'm certainly not complaining considering my holdings in SGP ^^


  1. I am not surprised at all by this move. Roch has been trying to close the Genentech deal since the summer. Eli Lilly snagged ImClone. Pfizer has been hoarding cash since 2007. And Merck needed to make this move in order to stay competitive with Pfizer after the Wyeth acquisition. Not to mention many Biotech/Pharma companies have no new drugs in the pipeline leaving acquisitions as the only growth options. However, this deal will be done via a complex reverse merger in which Schering-Plough will technically acquire Merck. This allows Shering to keep its drug Remicade and not give the rights to J&J.

  2. If I had followed the industry closer, this definitely woulnd't be surprisng as I've been informed mergers as these types are quite normal for large pharmas for the past 15 years. You definitely bring up a good point about MRK needing to do this to stay competative. However, how probable do you think it is for JNJ to make a counter offer, or to ask for an injunction due to conflict of interest?


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