Mergers, Acquisitions and Takeovers Case Study

Novartis' Acquisition of Chiron: Access to vaccine market

OR

Abstract:
Novartis AG (Novartis) was a leading global pharmaceutical (pharma) company. In the recent times, the company had not achieved much success in developing new drugs. Moreover, many of its drugs had either lost patent protection or were going to face the same in the next few years. The company was facing tough competition from generic drug makers, which had adversely affected its future growth prospect. In order to retain its leading position in the pharma industry, the company diversified into other segments, thereby expanding its product portfolio and geographic reach. In 2005, Novartis acquired the Chiron Corporation (Chiron), a leading pharma company having strong presence in vaccines, blood testing and biopharmaceuticals. This case deals with Novartis’ acquisition of Chiron, which would help the former to enter into vaccine and blood-testing businesses for the first time and strengthen its biopharmaceuticals business segment. The case has provided background notes on the two companies and a detailed description of the pre-merger scenario of Novartis. It also discusses the acquisition deal in details. The case puts forth the rationale behind the acquisition and the expected benefits for Novartis. It finally discusses the possible challenges which Novartis can face in the near future. The case also provides a detailed note on the structure and future trends of the global vaccine market.

Pedagogical Objectives:

• To understand global vaccine market
• To understand the growth strategy through acquisitions
• To analyse the rational behind any M&A deal
• To analyse framework for successful merger, blueprint for integrating acquisitions
• To discuss strategic reasons for M&A value creation.

Keywords : Mergers,Acquisitions,Alliances Case Study;Novartis AG; Chiron Corporation; Pharmaceutical industry; Biopharmaceuticals; Vaccines; Blood testing equipment; Avian flu / bird flu; Influenza vaccine; HIV/AIDS; Merger synergies; Global vaccine market; NAT (nucleic acid testing) technology

Contents : 
Global Vaccine Market: A Brief Overview
Novartis: Pre-Merger Scenario
Merger Rationale
Top 20 Global Pharma Companies
Novartis – Different Division
Vaccines Reduced The Incidence Of Infections