The pharaceutical industry

The increase in merger activity has presented an interesting challenge to business practitioners, corporate analysts and academics alike.The past two decades however has witnessed a re-emergence of this trend, with a proliferation of mergers and acquisitions taking place across virtually all sectors of industry, as well as national boundaries. This recurrence has clearly been the result of many motivations and is an indication of the logical responses of firms to changes in their competitive …

…by those reaching the end of their patent life. Therefore although a merger or an acquisition strategy will allow a particular company to obtain a number of good products from its partner, this by itself cannot immediately generate a superior product portfolio, especially in the short-term. Instead, synergy must come not only from the R&D capabilities of the merged company, but also from all other aspects of the firm over the long-term.