QDIS Blog

Forbes writer Matthew Herper has a great article outlining why he rationally thinks Bristol-Myers Squibb and Sanofi-Aventis should NOT merge.

Why Bristol And Sanofi Shouldn’t Merge - Forbes.com:

His article makes a lot of sense such as the difference in philosophy with Sanofi still hanging on to the blockbuster drug mentality and BMS being more focused. Also mentioned is that BMS has had a good relationship with the FDA and been able to get drugs approved whereas Sanofi has had their problems. All of this and more makes perfect sense. However, I don’t think sense plays into many mergers. I think that those in favor of mega-mergers have to much invested in making some kind of merger happen especially given the buyout options in some upper managements contracts. Then there is also egos with people who have initiated the deal being blinded to reality and wanted mergers to go through for personal reasons. Humans tend to have a reluctance to being able to walk away from deals that may not be the best. This is often referred to as “sunk-cost”. They have so much invested (usually emotionally )that it becomes impossible to accept facts. What facts are brought to light are brushed aside with justifications.

I think this will likely happen and may even be announced before the end of the year. However, I personally agree with Matthew Herper that it isn’t a good idea.

Technorati Tags: BMS, Bristol-Myers Squibb, pharma M&A, pharmaceutical deals, Sanofi, Sanofi-Aventis

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