Expert comment: Pfizer and Allergan merger makes sense in an industry forcing for a race scale
Following the announced merger between Pfizer (NYSE: PFE) and Allergan (NYSE: AGN) today, John Colley, Professor of Practice at Warwick Business School, UK, and an expert on large-scale mergers, has made the following comments:
"Botox producer Allergan has been acquired for $160 billion by Pfizer to make it the world's largest pharmaceutical business. This deal follows a pattern in which the pharmaceutical industry has seen acquisitions totalling over $600 billion this year as the industry consolidates.
"Industry valuations increase as industry players become concerned at being left behind in the race for scale. In the instance of Pfizer it is also pursuing greater growth as its own established products are losing patent protection at a greater rate than it can produce innovative products.
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