Acquisition Of Medco Containment Services Inc.

1101 WordsSep 20, 20155 Pages
Introduction Mergers and acquisitions occur because executives from both the acquirer and target companies see the large amount of value that will result with a conjugation of each company’s assets. The acquisition will allow for the emergence of new identities and properties. Mergers and related acquisitions have occurred in a series of outbreaks. Recently, the pharmaceutical industry is seeing a rush of new mergers and acquisitions because of a combination of investor pressure and a narrowing window of opportunity. The reason for this current pattern is due to the fact that pharmaceutical companies and their associated board of directors believe that acquisitions are the clear way to grow revenues. The Merck Company’s acquisition of Medco as a pharmacy benefit manager are pursuing to increase their customer size and negotiating power, while developing new ways to serve customers. This acquisition will insert Merck within the trending consolidation of pharmaceutical benefit managers and drug suppliers, as this industry is becoming more than just an administrator and negotiator. This report analyses the acquisition of Medco Containment Services Inc. by Merck & Company, the largest drug manufacturer. Furthermore, the analysis will cover the major benefits of the acquisition such as value generation, market share, and customer acquisition through economies of scale. Merck & Company Merck & Co. is the largest drug manufacturer and provides global pharmaceutical

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