Mergers: Who’s Next? Here’s Your List
3 CommentsBy Ed Silverman // March 19th, 2007 // 9:22 am
In an attempt to take the guesswork out of such speculation, Catherine Arnold of Credit Suisse examines a host of issues confronting the 13 major drugmakers, and in an investor note this morning, decides that Wyeth and Bristol-Myers Squibb rate as the highest ‘natural’ targets, while Novartis and GlaxoSmithKline are the most likely acquirers.
The combinations deemed ‘very’ possible:
Pfizer + Wyeth;
Novartis + Wyeth;
Glaxo + Bristol;
Glaxo + Astra;
Sanofi + Bristol.
In her 88-page report, Arnold reviews various considerations, including therapeutic categories and anti-trust concerns; cost-cutting synergies and campaigns under way; corporate cultures (Roche prefers to be a wallflower); change of control clauses for key products (the cholesterol joint venture between Merck and Schering-Plough); liability (Merck’s Vioxx and Wyeth’s fen-phen), and other intangibles (Lilly’s out-of-the-way Indiana HQ).
All totaled, there are 78 possible combinations. Of course, there are no guarantees. As Arnold points out, an “important caveat” may be “spin-offs, divestiture options or financing strategies that make better use of cash. Nonetheless, this serves as a reminder to place bets, update resumes and watch if Credit Suisse collects any fees.
[tags]Abbott Laboratories, AstraZeneca, Bristol-Myers Squibb, Eli Lilly, GlaxoSmithKline, Johnson & Johnson, Merck, Mergers, Novartis, Pfizer, Roche, Sanofi-Aventis, Schering-Plough, Wyeth[/tags]
Cuber Don
For Credit Suisse, any merge is potentially money in their wallet, so - in a perfect Credit Suisse World - the 78 possibilities of merges would not be possible combination at all, but real merges… and, if possible, all handled by Credit Suisse Itself.
How do you say that in English? Conflict of interest?
ed
Hi Don,
Well, their is a disclosure on the report that the firm does business with one or more companies. So I just raised the obvious point. Whether her report drums up any business, well, maybe. Most likely, the companies don’t need a report to remind them of the climate and what options exist.
On the other hand, unsophisticated investors who don’t see the full report and, therefore, the disclosure, may not recognize what’s going on. That’s unfortunate, I agree. In any event, such reports serve a purpose, but are, as you point out, potentially self-serving. But that’s show biz, I mean, Wall Street.
ed
zak jones
hu cares