Corporate Turnaround of Pharmacia & Upjohn


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:

Case Code : BSTR255 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Themes

Merger, Corporate Turnaround, Leadership
Case Length : 17 Pages
Period : 1995-2006
Pub Date : 2007
Teaching Note : Not Available
Organization : Pharmacia & Upjohn
Industry : Pharma
Countries : US / Sweden

Abstract:

The case details the merger of two major pharmaceutical companies - Sweden based Pharmacia and the US based Upjohn. It details the cultural and other problems faced during the merger and the subsequent turnaround of the merged entity under the leadership of Fred Hassan.

In the year 1995, Pharmacia and Upjohn merged to form Pharmacia & Upjohn and the merger was expected to create a major force in the global pharmaceutical industry due to synergies and complementary products of both the companies. However, the merger ran into problems due to cultural differences between the European and the American entities, which resulted in drastic fall in the revenues of the merged entity.

With the deteriorating financial position, analysts opined that the company would be a target of a hostile takeover. At this juncture, Fred Hassan assumed the responsibilities of CEO of the company in 1997.

After implementing the transformational plan put forth by Hassan, the company's revenue grew and it recorded profits from the fiscal year 1998 onwards. In 1999, Pharmacia & Upjohn was merged with Monsanto forming Pharmacia Corporation. In 2002, Pharmacia Corporation was acquired by the pharmaceutical giant Pfizer.

Issues:

Understand the importance of cultural issues in cross-border mergers

Appreciate the role of a leader in reviving the fortunes of a loss making company

Evaluate the strategies adopted by Hassan in turning Pharmacia & Upjohn around

Examine the changes brought in by Hassan in Pharmacia & Upjohn

Contents:

  Page No.
Pfizer Acquires Pharmacia 1
About Upjohn 2
About Pharmacia 4
Rationale for the Merger 6
The Problems 10
Hassan's Turnaround Efforts 11
The Results 13
Exhibits 13

Keywords:

Pharmacia , Upjohn, Merger and Acquisition, Cross Border Mergers, Cultural Mismatch, Corporate Turnaround, Merger Costs, Cultural Problems, Hostile Takeover, Zyvox, Reorganization , Product Portfolio, Best-Managed Behaviors

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