The new Merck: Beating the odds (B)
DARMSTADT, SEPTEMBER 2009. Jon Baumhauer, Chairman of the Merck Family Council and an influential member of the E. Merck KG Executive Board, could not hide a smile as he recollected the confidential first meeting together with members of the Merck KGaA Executive Board with Ernesto Bertarelli and his Serono advisor on 19 September 2006: “When Serono got back to us after months of trying to sell itself to every big pharma in the world, they were of course anxious to get a deal done quickly. But not that quickly… When they asked how long it would take Merck to get back to them, I told them, ‘Negotiations can start immediately.’ That took the air right out of them. They clearly underestimated the family cohesion and their ability to rally behind the deal. We had discussed this internally for months, and the family was 100% involved. I did not need to go back to them: They had given their formal approval. That very much sealed the deal. This is what family can do in business…”. The Serono acquisition proved a defining moment for both the family and the company, a truly transformational merger. Merck became one of the world’s leading biotech companies and the seventh largest pharmaceutical company in Europe. It gave the combined group the R&D firepower and critical mass to play in the same league as the “big pharma” players, Amgen and Roche. It was: “…not a scale or size merger, but a knowledge and capability merger. Our two companies are complementary and together create one that, in the mid-size arena, has world-class knowledge in biotech and small molecules.” But challenges remained. Had the firm finally reached an efficient scale? Would impending profound changes to health policies wreak havoc with current profit drivers? Would it be possible to maintain the coherence and integrity of the family with the company’s exploding size? Would family ownership continue to decline? Learning objectivese: Managing a family business for sustainability; sophisticated family and business governance structures; managing growth; technology innovation; maintaining the entrepreneurial spirit; multi-generation family business; critical size and growth issues in the pharma business; managing incentive systems for executives; managing a transformational merger.
2006-2009
Cranfield University
Wharley End Beds MK43 0JR, UK
Tel +44 (0)1234 750903
Email [email protected]
Harvard Business School Publishing
60 Harvard Way, Boston MA 02163, USA
Tel (800) 545-7685 Tel (617)-783-7600
Fax (617) 783-7666
Email [email protected]
NUCB Business School
1-3-1 Nishiki Naka
Nagoya Aichi, Japan 460-0003
Tel +81 52 20 38 111
Email [email protected]
IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.
Research Information & Knowledge Hub for additional information on IMD publications
The case study delves into strategic transformation and leadership transitions at Unilever since 2009. Unilever has been an industry leader of busi...
The case study examines recent aviation safety concerns at Boeing, focusing on manufacturing issues, leadership decisions and regulatory oversight....
The case is seen through the eyes of the newly appointed supply chain director at a cosmetics company based in Berlin. The general manager has task...
Few Business to Business (B2B) marketplaces have succeeded. Metalshub has successfully combined a software platform as a service, with a marketplac...
The case focuses on Contabilizei, a Brazilian startup providing online accounting services for small and medium-sized enterprises (SMEs). The case ...
Companies that modularize and externalize their best capabilities are in a strong position to seize unexpected opportunities. Prediction is hard. T...
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
in I by IMD 24 June 2024
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
Case reference: IMD-7-2457 ©2024
Research Information & Knowledge Hub for additional information on IMD publications
Case reference: IMD-7-2546 ©2024
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications
in MIT Sloan Management Review Summer 2024, vol. 65, no. 4
Research Information & Knowledge Hub for additional information on IMD publications
Research Information & Knowledge Hub for additional information on IMD publications