Acquisition of Wyeth by Pfizer
Neo-classical theories see mergers and acquisitions (M&As) as efficiency improvement measure taken by the organizations in response to industry challenges such as deteriorating profitability, reducing market share, duplication of resources, stringent industry regulation etc. (Jovanovic and Rousseau, 2002). However, neo-classical theory alone cannot describe a wide range of reasons that force the companies to merge together or adopt an acquisition strategy (horizontal or vertical acquisition) to obtain or sustain a competitive advantage by achieving synergy, diversify business portfolio to distribute risk, attain growth, increase bargaining power with buyers and suppliers or to simply eliminate competition (Marks & Mirvis, 2013).
This paper will discuss the case of biggest acquisition in the pharmaceutical industry with the acquisition of Wyeth by Pfizer in January 2009 for $68 billion, the second biggest acquisition in the history of corporate