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The indispensable European
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Pharmaceuticals
FEW industries have been shaped more by mergers and acquisitions than pharmaceuticals. Even so, the frenzy of dealmaking in recent years has been remarkable (see chart). In the first ten months of this year, mergers involving drug companies in the S&P 500 share index were worth a total of $328 billion, according to Dealogic, an information provider. Last year pharmaceuticals was the most deal-hungry industry in America. So far this year it is behind only the technology industry. But that was before news emerged on October 29th of a possible bid by Pfizer to buy Allergan, a Dublin-based firm best known for its Botox anti-wrinkle treatments. If it went ahead, the deal would create the world’s largest drug firm, with a stockmarket value of more than $300 billion.
Some of the merger mania is driven by reasons not specific to the drugs industry, such as historically low interest rates. These make the returns on buying assets relatively more attractive. Mergers also offer the promise (though not always the reality) of …Original Article
