Abstract
The world pharmaceutical industry continues to consolidate. But two multi-billion-dollar deals just announced involving so-called second-tier drug firms are diametrically opposed in nature. On the one hand, the boards of directors of the U.S.'s Upjohn and Sweden's Pharmacia unanimously approved a friendly merger. On the other hand, a $2.6 billion cash offer by Rhone-Poulenc Rorer to buy the U.K.'s Fisons was soundly rebuffed by Fisons. Rhone-Poulenc Rorer is 68% owned by French chemical maker Rhone-Poulenc. Unlike the previous Glaxo-Wellcome and American Home Products-American Cyanamid deals—which each yielded a company with more than $12 billion in annual sales—the new deals would create companies only half as big. In the first deal, a tax-free exchange of shares between Kalamazoo, Mich.-based Upjohn and Stockholm-based Pharmacia will form a company—to be named Pharmacia & Upjohn Inc.—with combined 1994 sales of $7 billion. Based on prevailing exchange rates and closing stock values on Aug. 18, the merge...
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