MERGERS AND ACQUISITIONS; TO OPTIMIZE PERFORMANCE WITH SYNERGISTIC APPROACH IN PHARMACEUTICAL FIRMS

Abstract

A firm's performance up to great extent relies on availability of resources, controlled by different factors in the environment. Merger and acquisition is a way to manage these resource dependencies. This paper presents an overview of the Merger and acquisition which occurs due to resource problem. This paper extends the resource dependence results to an intra-industry perspective. Due to the main focus on inter-industry merger and acquisition patterns in prior researches, the knowledge is very little in this field applied to explain horizontal type of merger and acquisition patterns. It shows that mergers and acquisitions among firms have tendency to take place with technological and competitive dependence. This paper can discover the reasons behind this type of mergers, as there are many factors affecting the performance of firms and provide a chance to other firms to target it. This paper analyzes the perception of different people belonging to different fields of work and interprets their point of views through questionnaires. The paper clearly shows the mergers and acquisitions among pharmaceutical firms to get the technological advancement, competitive edge against competitors and to get the advantage of R&D from the target firm as it is very necessary for a pharmaceutical firm to have advance knowledge about the medicines and biotech. This paper shows the likelihood of a resource dependence reducing acquisition is moderated by the crowding of firms’ alliances and technological positions. Acquisition is one way to reduce the resource dependence and get the technological advantage, benefit of R&D and a competitive edge to compete in the market.