Analyzing the impact of Big Pharma mega-mergers 1995'2014 on sales growth

Mergers and acquisitions have contributed 63% of Big Pharma's current and potential sales growth over the 1995-2014period, according to a new analysis by Datamonitor, which notes that  large-scale M&A activity remains an integral strategy of Big Pharma and will contribute nearly two-thirds of peer set sales growth over 1995'2014.

An analysis of the 22 largest Big Pharma M&A events since 1995 demonstrates that there are two distinct acquisition types: the purchase of smaller target companies with the primary strategic motive of extracting future sales growth and the purchase of larger target companies with the primary strategic motive of gaining an immediate increase in scale. Furthermore, Big Pharma players can be classified by their overriding growth strategy: those that 'Buy Growth,' those that 'Buy Scale,' those that used 'Multiple M&'' and those - only two players from a total of 12 - which have primarily avoided large-scale M&A to focus on an organic growth-driven strategy.

Mega-mergers (defined here as M&A events with deal sizes over $5 billion) have been a long-term strategic feature of the pharmaceutical industry and have played a key role in shaping the structure and composition of today's leading companies.