You've heard GlaxoSmithKline ($GSK) execs say it before, and now they're saying it again: No big mergers. And that includes deals the size of Genzyme, which is scouting about for justification of its refusal to entertain Sanofi-Aventis' ($SNY) $18.5 billion hostile offer. If that scouting raised a white-knight bidder, so much the better. And GSK is one of the companies Genzyme ($GENZ) is said to have contacted.
Not interested, SVP Patrick Vallance maintained during remarks to reporters at a strategy session in Cambridge, Massachusetts. "Those kind of big deals are incredibly destructive to research and development," said Vallance, as quoted by Reuters, adding that the process can lead to chaos. "There is an argument for maintaining a stable R&D organization."
Instead, GSK will continue to focus on smaller deals, partnerships and creative tie-ups. It will leave the Genzyme-type buyouts to other customers, such as Sanofi, which may be averse to megamergers, but figures a $20 billion deal would be workable. Sanofi's $69-a-share bid for Genzyme is set to expire early next month, but the French drugmaker may well extend the tender offer. Whether Genzyme's value-seeking expedition yields anything new by then is anybody's guess.
- read the Reuters piece