Our April 29, 2014 blog post,
M&A in the pharma sector: big deals are on the uptick,
spoke to the significant increase in deal activity in Q1 2014
within the Pharma, Medical & Biotech sector and, most notably,
within the pharmaceutical sub-sector. While there are critics who
rely on conventional wisdom to question not only the trend towards
pharma M&A this year but also the overall viability of pharma
megamergers generally — suggesting that large M&A deals
destroy value, disrupt critical programs, and subvert R&D
initiatives — a recent report published by McKinsey &
Company titled Why pharma megamergers work explains that such
criticisms are short-sighted. In fact, McKinsey points out that,
historically, pharma megamergers have been critical for the
long-term sustainability of acquirors, suggesting that any
short-term disruptions caused by a megamerger are greatly
outweighed by its future benefits.
