More Mega-Mergers in Big Pharma
On Monday, Merck (MRK) announced that it’s buying Schering-Plough (SGP) for $41 billion. This was only the latest big buyout in the world of major pharmaceutical companies, and I expect more to come.
Once Pfizer (PFE) made its move for Wyeth (WYE), Merck simply had to respond. In fact, I nearly added Schering-Plough this month’s Blue Chip Growth Buy List (the issue will be live next Monday).
Whenever you have low stock prices, too much money and a crowded industry, you’re bound to see a wave of consolidation. Shareholders love to hear that they’re being paid a 30% premium for their shares. The latest news is that Genetech (DNA) and Roche are about to get hitched. Roche has been pursuing Genetech pretty aggressively, but Genetech has shot down previous offers. It’s funny how a bear market can change people’s minds on these things.
So who’s next? I don’t know, but some of my favorite stocks in this sector include Bristol-Myers (BMY), Abbott Labs (ABT) and Amgen (AMGN).