Bristol Myers Squibb Analysis
the need to maintain a competitive edge is a key driver for M&A. This may involve acquiring new technologies to promote innovation or acquiring sales and marketing expertise to boost share of voice. It may facilitate geographic expansion and aid new market penetration, as would be the case with a combination of BMS with Wyeth.
The announcement of the planned merger of Pfizer and Pharmacia has changed the competitive landscape, and has forced a number of other companies to re-evaluate their potential future as independent entities. Bristol Myers Squibb would be wise to lead this bid at rebalancing the industry and should strongly consider merging and consolidation options with other large Pharmaceuticals. The firm cannot survive on its own and an acquisition of a smaller firm will not be sufficient for them to remain competitive.
While being acquired may be the best the best strategy for BMS and its shareholders, the firm must be weary of the downside of this option. Namely, loss of independence, the probable loss of numerous top management positions, potential drug divestment requests by the FDA which can force firms to sell off drug lines upon firm combination and foregoing the chance that they may be able to stabilize on its own. The downside from a shareholders perspective is far more limited and this group would probably be most in favor of this suggested strategy.