Capital Allocation In The Age Of Shareholder Activism
Maybe no company is safe from activists, but there are protective measures that managers and boards can take. What biopharmas can learn from Valeant Pharmaceuticals and Pershing Square’s pursuit of Allergan.
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The year 2014 was the biggest for pharma M&A in recent history, though it may be remembered equally for sagas and upsets that never materialized into finalized deals. Actavis, in the end, was the most aggressive acquirer, buying Forest and Allergan for a total of $89.3 billion in the two most expensive deals of the year.
Investor-friendly capital allocation and the rising strength of large biotechs and specialty pharmas have jeopardized Big Pharma’s position of strength in M&A. Analysis by Ernst & Young suggests that industry’s largest companies face unusual challenges – and must adapt to new marketplace realities.