It has been two weeks since Pfizer announced it was in “preliminary friendly discussions” with Allergan in regards to a potential megamerger, and the latest development, according to Bloomberg, is that the firms are looking to Allergan’s CEO Brent Saunders to head up the combined entity if a deal is made.
But such a merger would of course have greater repercussions than just the movement of management, and the formation of a Pharma firm valued at $330bn - more than the GDPs of Malaysia and Singapore – would also create the industry’s largest manufacturing network.
French Pharma Giant Sanofi described its network of 102 manufacturing facilities last week as “one of the largest plant networks in its peer group,” while Novartis had roughly 100 sites across all its divisions at the start of the year. Both firms are undergoing network restructures to reduce these numbers.
On top of this, Pfizer’s acquisition of Hospira in September added 16 more manufacturing sites, minus the Clayton, North Carolina site shuttered in June, therefore by our tally the new ‘Pharma Behemoth’ would have a network of 110 sites.
This would push levels far beyond the 78 sites Pfizer had following its last megamerger, the $68bn takeover of Wyeth in 2009.
Since then, the company has been reducing its network through a number of facility closures and has reduced its employee number from a total of nearly 130,000 post-merger to 78,300 at the end of last year.
Around 19,000 Hospira employees have since been added to the headcount, but the addition of an estimated 30,000 more from Allergan will push total headcount close to the Pfizer-Wyeth number.
Of course, Teva’s proposed $40.5bn acquisition of Allergan’s generics division will reduce the headcount and plant number somewhat if it goes through, but would still leave Pfizer-Allergan with a huge manufacturing footprint.