Performance of mergers and acquisitions in pharmaceutical industry: a comparative perspective

Mehmet Demirbag, Chang-Keong Ng, Ekrem Tatoglu

    Research output: Contribution to journalArticlepeer-review

    27 Citations (Scopus)


    This study provides new evidence on the nature of value creation in M&A activity based on a sample of giant pharmaceutical M&As and independent non-M&A rival firms. Relying on multiple indicators of performance, their post-M&A performance was compared with their pre-M&A performance as well as with the performance of other major pharmaceutical firms that have not been involved in M&A activity. Based on three measures of operating M&A performance, it has been noted in general that no value creation was realized in the sample M&As in terms of research productivity, return on investment, and profit margin. The sample M&As had lower research productivity than that of both pre-M&A and independent non-M&A rival firms. In a similar vein, with regard to return on investment, M&As were not better than their pre-M&A firms, but performed relatively better than their non-M&A rivals. As far as the profit margin is concerned, the sample M&As, however, appeared to have better performance than pre-M&A firms and almost on par with the non-M&A rivals.
    Original languageEnglish
    Pages (from-to)41-61
    Number of pages21
    JournalMultinational Business Review
    Issue number2
    Publication statusPublished - 2007


    • acquisitions and mergers
    • pharmaceutical industry
    • performance evaluation


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