The purpose of this paper is to analyse the mergers and acquisitions that have taken place in the Indian pharmaceutical industry, and develop a framework, which would provide directions for a successful merger. In the context of a spurt in the number of Indian companies joining the bandwagon of mergers and acquisitions (M&As) this paper assumes significance as it would provide inputs for companies planning such an M&A. The framework has been developed on the basis of information gathered through in-depth interviews of top executives of pharmaceutical companies, which have undertaken M&A in the recent years. This information has been supplemented by data from the Pharmaceutical Retail Store Audit conducted by ORG-MARG.
Acquisitions are a principal way in which companies grow and expand. Therefore, the strategic implications of them are of considerable importance. However, reasons for acquisition are not always strategic in nature. The decision to acquire a company should result from a well-developed Acquisition Strategy integrated with the whole Corporate Strategy. Moreover Acquisition Strategy is Just a tool of the Corporate Strategy. The combination of acquisitions being based on motives of a non-strategic nature, together with payment of a substantial premium for the acquired company, most often under time pressure, has in many cases led to unsuccessful acquisition results. We will suggest in this lecture to approach company acquisition from the Corporate Strategy perspective. At one side this should greatly enhance, but not guarantee success in either an individual acquisition or in an acquisition program, at the other side this will underline the important role of the marketing function in the initial steps of the acquisition process.