The urge to merge in the pharmaceutical industry

Loizos Heracleous and John Murray

European Management Journal, 2001, vol. 19, issue 4, 430-437

Abstract: This Case Study focuses on the giant Glaxo Wellcome and SmithKline Beecham merger to form Glaxo SmithKline. There is a general background of evidence to show that mergers frequently destroy shareholder values. The pharmaceutical sector is no exception, even though companies are in the early stages of healthy growth and not seeking consolidation because they are mature. The urge to merge is stimulated essentially by intense competitive pressures in pharmaceuticals. Chief Executive Jean-Pierre Garnier faced many challenges in early 2000, primarily how to deliver the promise of the merger. The case study analyses the growth of the pharmaceutical industry, its business system and value chain, and the steps to merge between Glaxo Wellcome and SmithKline Beecham. The case is followed by commentaries from experts in the field which help to form opinion on whether the merger will succeed.

Keywords: Glaxo; SmithKline; Mergers; Pharmaceutical; industry; Shareholder; value (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (7)

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