Merck and Company is a worldwide organization engaged in the business of discovering, developing, producing and marketing products and services for the healthcare industry. It is the world's largest ethical drug manufacturer, producing both human and animal pharmaceuticals. An international organization, the company has grown both through acquisition, internal growth and through joint ventures with other organizations. This research explores the mergers and acquisition strategy that Merck has followed recently, and explores the ramifications of that strategy both for the company and for the nation as a whole.
The 1980s were a particularly active period for Merck in terms of mergers and acquisitions. The company acquired or increased its ownership position in ten companies during the 1980 - 1989 period, while selling its interest in only four companies during the same time (Moody's Investors Services, 5973). Some of the acquisitions made during this time were related to the pharmaceutical industry, such as the acquisition of Torii & Company, which manufactured and distributed pharmaceuticals, Abello, S.A., a Spanish pharmaceutical company, and Neopharmed, an Italian pharmaceutical company. In addition to increasing Merck's presence in the pharmaceutical industry, these companies also increased the company's standing on a worldwide basis.
However, other acquisitions made during the 1980s were outside the company's primary business. These included Rotary Drilling Services, an Oklahoma company engaged in oil drilling, and the water management technology business of Hercules Specialty Chemical Company. These were both American companies that provided Merck with a broader base of operations, making it less dependent on the healthcare industry, but which took it somewhat afield from its core business. However, there are some benefits associated with these choices in that specialty chemical products have a wide variety of applic...