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This is Session Number 10.
It's about mergers
and acquisitions
in the pharmaceutical industry.
This is Radi Haloub,
associate professor
and program leader for
biotech and
pharmaceutical management
at UCL Global Business
School for Health.
0:16
The aim of this session is
to provide definitions.
Think about the drivers of
mergers and acquisitions,
financing merger and acquisition,
and defense strategies,
and what do we mean by demerger
and going back to
simplicity that a lot of
pharmaceutical companies
are doing these days?
0:33
Merger and acquisition is
defined by Hitt et al. in 2019.
Merger is a transaction in which
two firms agree to
integrate their operations
on a relatively coequal basis
because they have resources
and capabilities
that together may
create a stronger
competitive advantage.
On the other hand, an acquisition
is a transaction in which
one firm buys a controlling
stake in another firm,
which subsequently becomes
a subsidiary business
within its portfolio.
An acquisition involves one firm
taking over the ownership
or equity of another,
hence an alternative term
can be used, 'takeover'.
1:19
Merger can be two companies
with equal resources
and competencies.
They create a big
company afterwards.
A lot of these examples
are available,
like GlaxoSmithKline, GSK.
They merged with each other,
and they became one company.
Acquisition is different.
Acquisition is when
a company would like
to take over another one,
and that Company B, for example,
will become a
business unit within
the bigger organization
of Company A.
These are the
differences between
merger and acquisition.
That's also applicable
for pharmaceuticals,
and the biotech industry.
In order for us to understand
