For some California companies, mergers and acquisitions may be a key way for them to experience strong growth and increased profits. Within the pharmaceutical industry, these types of transactions are fairly common. There are some things that companies should do to make the success of their deals more likely.
Mergers and acquisitions can help to expand market access while increasing technological advances, but many end up failing. According to the University of Texas at Dallas’s Naveen Jindal School of Management, between 70 and 80 percent of acquisitions within the pharmaceutical industry result in the destruction of value rather than its increase.
Many pharmaceutical companies look to acquisitions and mergers as a way to come up with new inventions. The researchers at the University of Texas found that pharmaceutical companies that want to acquire others should try to keep the scientists who are employed at the target firms on as their employees. This may help to expand the knowledge base as the scientists from both companies work together and engender new ideas. The companies should then work to integrate the scientists from the target companies into their own.
Mergers and acquisitions can be highly complex. Companies that are interested in acquiring other companies may want to get help from experienced commercial law attorneys who routinely work on these types of deals and who may help their clients to conduct due diligence on the target companies and to complete in-depth analyses. Counsel may also offer legal advice about the various regulations that might impact a potential deal. If the companies decide to move forward with the transactions, the attorneys may work to structure it in such a way that their clients’ financial interests are protected.