Merck & Medco You Decide Assignment

3020 Words13 Pages
Merck’s acquisition of Medco:
Merger Analysis and Recommendation

by Marzena Porebski

Table of Contents

1.0 INTRODUCTION 2 2.0 THE COMPANY OVERVIEW 3 2.1 Merck & Company 3 2.2 Medco Containment Services Inc. 5 2.3 The Companies Advantages 6 3.0 MERCK & MEDCO MERGER 7 3.1 Acquisition Details 7 3.2 Merger Analysis 7 4.0 CONCLUSION 11 5.0 APPENDIX 12 5.1 Financial Reports 12 5.2 Sales of Drugs and Prices 13 5.3 Merger and Acquisition Activity 14 5.4 Market Share 15 5.5 Additional Documents 15 6.0 References 15


Mergers and acquisitions occur because directors see benefits that could come from combining two or more businesses, which could improve the
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Merck’s acquisition of Medco will benefit the company. 2.0 THE COMPANY OVERVIEW

3.1 Merck & Company

Merck & Company (MRK) is one of the largest pharmaceutical companies in the world. It is a public company incorporated in 1927. The company is headquartered in White House Station, New Jersey. Friedrich Jacob Merck, founder of Merck, originally purchased an apothecary in 1668 in Darmstadt, Germany, called 'At the Sign of the Angel.' The pharmacy was transformed by Heinrich Emmanuel Merck into a drug manufactory in 1827 (St. James Press).
Merck is one of the seven largest pharmaceutical companies in the world in terms of market capitalization and revenue. The company describes itself as "a global research-driven pharmaceutical company" that "discovers, develops, manufactures and markets a broad range of innovative products to improve human and animal health, directly and through its joint ventures". The company primarily markets its drugs to businesses rather than directly to the consumer. These businesses include wholesalers, retailers, hospitals, government agencies, HMO’s and other institutions (Wikimedia Foundation, Inc.). Merck, like other major pharmaceutical companies, earns a large amount of its revenue from a few important drugs in its portfolio. One of most important prescription drugs company is manufacturing are Vioxx (a painkiller used to treat arthritis), Zocor and Mevacor (used to modify cholesterol

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