Mergers, Acquisitions and Takeovers Case Study

Hospira’s Acquisition of Mayne Pharma: Creation of World’s Leading Generic Injectable Pharmaceutical Company

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Abstract:

In September 2006, the Illinois (US) based specialty pharmaceuticals and medication delivery company, Hospira Inc. announced its decision to acquire the Austalian speciality injectable pharmaceutical drug company, Mayne Pharma for US$2 billion (AU$2.6 billion). While Hospira was the market leader in the US generic injectable drug market, Mayne held a major share of the same market in Australia and Europe. The deal would provide important strategic advantages to Hospira. The acquisition, while on one hand, was expected to increase Hospira’s international sales by two fold, on the other hand, it would enable the combined company to reduce the cost by about US$50 million, effective from 2007.

The case deals with the possible product and financial synergies of the acquisition details, Hospira’s rationales and the corresponding strategies of capturing the lucrative global generic injectable drug market. However, the success of the deal depended on an important factor, such as the integration of the varied work cultures of the US and Australia. In order to have a better understanding of the business situation, it not only provides a brief outline of the global and the US generic injectable drug market, but also the profile of the two companies.

Pedagogical Objectives:

• How product development life cycle of a pharmaceutical company differs from that of a manufacturing industry
• To analyse the prospects of a particular drug in terms of efficiency and penetration
• To analyse the product portfolio and pipeline drugs of a pharmaceutical company
• To understand the synergies of a merger of two pharmaceutical companies.

Keywords : Mergers,Acquisitions,Alliances Case Study;Hospira; Mayne Pharma; Acquisition; Pharmaceuticals; Generic; Generic injectable drug; Drug delivery system; Abbott Laboratories; Global generic market; Product synergy; Cost efficiency; Integration of work culture; Homogenous work force

Contents : 
Mayne Pharma
The Possible Synergies
The Sales Performance of Hospira Inc
The Business Divisions Of Mayne Pharma
The Overall Financial Performance Of Mayne Pharma
Hospira’s Customization Of It’s Products To Satisfy The Customers Needs
The Global Distribution Network of Mayne Pharma