Mergers and Acquisitions in pharmaceutical industry

1. Potential impacts and side
effects associated with
Mergers and Acquisitions
within Pharmaceutical
industry
By Mostafa Ahmed Talaat Abourashed
Under supervision of Dr Ashraf Elsafty
eslsca H 41C

2. Introduction
 Mergers and Acquisitions is strategic management
approach that has been followed recently among
pharmaceutical companies to gain more power and
growth within Market.
 Different from other studies, this research didn’t high
light the gains from Mergers and Acquisition but on the
other hand it spotted the major potential consequences
and impacts associated with Mergers and Acquisitions
commonly referred to as side effects.

3. Definitions
 Merger
 A strategic management approach in which two or more
corporations unit together, to grow and achieve more
Sales, revenues and hence more profits and market
share.
 Acquisition
 A strategic management approach in which one
company totally purchase another one where this
acquired company does no longer exist.

4. Importance of the study
 Highlight the post M&A consequences and or side
effects
 Produce a guideline to collect some M&A side effects in
one source to be a reference for further research.
 Identify new variables and side effects that may add to
the proposed model and enrich the literature.

5. Mergers and Acquisitions
Change management
Culture integration
Performance
(Employee /financial)
HRM
Layoffs
Independent
Dependent
Mediating
Conceptual Model and Variables

6. Summary of Literature Review

7. Change Management
 Change management is process, tools and techniques to
manage the people side to change to achieve required
business outcome.
 The literature review for change management ended up
with the following hypothetical statement:
 There is a positive relationship between Change
management as a potential side effect to Mergers and
Acquisitions.

8. Culture integration
 Culture is a group of norms, skills and knowledge that
are transferred among generations.
 The literature review for culture integration ended up
with the following hypothetical statement:
 There is a positive relationship between Culture
integration as a potential side effect to Mergers and
Acquisitions.

9. Performance (Employee/Financial)
 Performance is actual results attained and compared to
already planned, results in that case are either achieved
or failed.
 The literature review for Performance ended up with
the following hypothetical statement:
 There is a positive relationship between Employee
Performance as a potential side effect to Mergers and
Acquisitions.
 There is no or positive relation relationship between
Financial Performance as a potential side effect to
Mergers and Acquisitions.

10. Layoffs
 Layoff in simple words as temporary or permanent loss
of employee job, dismiss from a job or simply losing a
job or termination.
 The literature review for Layoffs ended up with the
following hypothetical statement:
 There is a positive relationship between Layoffs as a
potential side effect to Mergers and Acquisitions.

11. Research and Development
 R&D was a variable captured during literature review
where giant pharmaceutical companies are always
looking for new pipe lines to grow in the market.
 The literature review for Research and Development
ended up with the following hypothetical statement:
 There is no or positive relationship between Research
and Development as a potential side effect to Mergers
and Acquisitions.

12. Human Resource Management
 HRM plays a vital and important role during and even
after M&A.
 It affects and influence nearly all associated side effects
from M&A.
 The literature review for Human Resources ended up
with the following hypothetical statement:
 HRM has no or does influence Change management.
 HRM does influence Culture integration, employee as
well as financial performance and layoffs.

13. Mergers and Acquisitions
Change management
Culture integration
Performance
(Employee /financial)
HRM
Layoffs
Theoretical Framework
Research and
Development

14. Conclusion
 This research has explored the potential impacts and side
effects associated with M&As.
 New variable(R&D) identified that is affected by M&A and
assumed to be a driver for M&A within Pharma industry.
 HRM was found to have an influence on change mangement.
 A theoretical framework and a number of hypotheses were
developed, so; further research should be conducted to prove
validity of the hypotheses included in this research.
 Produced a guideline that collected some M&A side effects in
one source to be a reference for further research.