Clash of the Titans? The Merger of Two Industry Giants AT a time of uncertainty and imminent change in the pharmaceutical industry, the successful merger of Pfizer and Warner-Lambert is dependent upon several critical factors. The new Pfizer is faced with the daunting task of facilitating a smooth integration between Pfizer and Warner-Lambert to take advantage of potential synergies and competitive advantages offered by the merger of these two industry giants. In order to achieve success, the new Pfizer must overcome three potentially devastating problems that pose a threat to achieving a successful merger. These are: 1) integration difficulties; 2) inability to achieve synergy; and 3) the prospect that the new Pfizer may be too large to operate in as an efficient and effective company.
I. CONCLUSIONS During the 1990's, Pfizer asserted itself as the preeminent company in the pharmaceutical industry. Pfizer's revenue has exceeded the industry average every year throughout the last decade.
In 1999, Pfizer became the world leader in pharmaceutical sales by doubling the industry average for sale revenue. Over the last decade, Pfizer's stock price has increased by more than ten times. Pfizer's investment in research and development has increased by over six times throughout the last ten years. The merger of Pfizer and Warner-Lambert combines the #1 and #2 fastest growing pharmaceutical companies. The new Pfizer's Earnings per Share are anticipated to increase 25% by 2002. The merger of Pfizer and Warner-Lambert is also expected to result in an annual cost savings of $1.6 billion. In order to achieve this anticipated financial success, the new Pfizer must ensure that the merger is structured to overcome potential integration difficulties that may arise from integrating Warner-Lambert into Pfizer's highly successful strategic assets, capabilities, and competencies.
Part of Pfizer's phenomenal success can be attributed to the company's effective...