Case Study – Gsk’s Acquisition of Sirtris: Independence or Integration?

2528 Words Jul 15th, 2013 11 Pages
Case Study – GSK’s Acquisition of Sirtris: Independence or Integration?

Questions to be answered:
1. Slaoui and Andrew Witty, GSK’s CEO must sell the acquisition of Sirtris to two key constituencies: the GSK board of directors, as well as to Westphal and the senior team at Sirtris. How would you make these pitches?
2. If you are Westphal, how do you feel when you get the call from Slaoui? What terms are you most inclined to negotiate?
3. The vast majority of startups “exits” during the past decade have been through acquisitions by larger companies. What is likely to change at Sirtris after the acquisition? More generally, how do entrepreneurial companies change after they are acquired? Is there a role for an entrepreneur
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In other words, the price has to be justified and not seem like an arbitrary number. Slaoui and Witty managed to this by emphasizing on Sirtris’ strengths in terms of their research, but particularly in terms of the actual field Sirtris is engaged in, that could potentially be a transformative science allowing for the development of multiple drugs that have the potential of treating diabetes and other diseases that promise a high turnover when launched. In other words, I would make sure that the members of the board are able to see the potential benefits and above all profits of the respective acquisition.
At the same time I would stress the risks that are involved in investing into a breakthrough science that might as well turn out to be nothing but a hype that basically led to absolutely nowhere. Obviously, this possibility should be accompanied by explaining that if the science/research leads to what they believe it would, the acquisition will be more than justified as it will create a portfolio of products, as opposed to most other acquisitions that have a one-product story. Also, the GSK board members will care to know what the strategy is going to be in terms of organizational structure of the new entity Sirtris. This part is essential, because it will eventually have an impact on the performance of the new business unit. Here, it is important to have a plan of action that has been elaborated thoroughly but remains
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