GlaxoSmithKline CEO Andrew Witty swung by Health Blog HQ this week. Given all the M&A action in the industry in the past year (Pfizer-Wyeth & Merck-Schering Plough, to name a few biggies), we asked him about GSK’s acquisition strategy.
“We’re not in the market for traditional, large-scale, premium acquisitions,” he said.
He didn’t focus on the pipeline drugs or growing franchises that acquirers often cite. Instead, he waded into the ramifications of making a big acquisition at a moment when many segments of the industry are contracting.
“People are buying companies and taking costs down,” he said. “You’re paying a 30% or 35% premium to have the opportunity to fire people.”
Instead, he’s looking for “bolt-on acquisitions” — under $5 billion — that add to growing businesses such as vaccines or consumer products, or to key emerging markets. And even those have to be at a the right price; the company walked away from a few deals in the second quarter of last year, because they were too expensive.
Photo: Associated Press