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The urge to merge in the pharmaceutical industry

Author

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  • Heracleous, Loizos
  • Murray, John

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.

Suggested Citation

  • Heracleous, Loizos & Murray, John, 2001. "The urge to merge in the pharmaceutical industry," European Management Journal, Elsevier, vol. 19(4), pages 430-437, August.
    • Handle: RePEc:eee:eurman:v:19:y:2001:i:4:p:430-437
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    Cited by:

    1. Ye Jin Lee & Kwangsoo Shin & Eungdo Kim, 2019. "The Influence of a Firm’s Capability and Dyadic Relationship of the Knowledge Base on Ambidextrous Innovation in Biopharmaceutical M&As," Sustainability, MDPI, vol. 11(18), pages 1-17, September.
    2. Wei Teng, Chih & Foley, Lucy & O'Neill, Peter & Hicks, Chris, 2014. "An analysis of supply chain strategies in the regenerative medicine industry—Implications for future development," International Journal of Production Economics, Elsevier, vol. 149(C), pages 211-225.
    3. Katsaliaki, Korina & Kumar, Sameer & Loulos, Vasilis, 2024. "Supply chain coopetition: A review of structures, mechanisms and dynamics," International Journal of Production Economics, Elsevier, vol. 267(C).
    4. Wajid, Abdul & Khan, Kashif Hasan & Handa, Harish, 2022. "Innovations Through Mergers and Acquisitions in the Pharmaceutical Sector," EconStor Open Access Book Chapters, in: Technological Innovations for Sustainability and Business Growth, pages 91-104, ZBW - Leibniz Information Centre for Economics.
    5. Jeffrey Pfeffer & Christina T. Fong, 2005. "Building Organization Theory from First Principles: The Self-Enhancement Motive and Understanding Power and Influence," Organization Science, INFORMS, vol. 16(4), pages 372-388, August.
    6. Pedro Domingos Antoniolli, 2016. "Information Technology Framework for Pharmaceutical Supply Chain Demand Management: a Brazilian Case Study," Brazilian Business Review, Fucape Business School, vol. 13(2), pages 27-55, March.
    7. Park, Sungwook & Kwon, Youngsun, 2023. "Disentangling the effects on OTT platform performance of three strategies: Pricing, M&As, and content investments," Telecommunications Policy, Elsevier, vol. 47(8).

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