Reference no: EM133315492

One of my favorite topics from this course was alliances an acquisitions. I enjoyed learning more about the process of companies working together, or even buying out their competition. It is often true that many companies cannot operate on their own, and need assistance from others, or need to buy out others to have a chance at new markets. I decided to look at India for acquisitions and alliances, and found an article about India's high level of cross-border acquisitions in the pharmaceutical industry.

This article interested in in particular because it wants to prove the increase of shareholder wealth over the acquisitions, a net positive of purchasing outside companies. Most research I have had to do was, as this is, to prove something right or wrong. But in this example the results can be used to attract investors. By using data of the last 15 years, they were able to conclude there is a positive result in acquisitions, especially when those take place in the United States or United Kingdom. The Unites States is the largest importer of Indian pharmaceuticals. This is a sign of the profitability in doing cross-border acquisitions into already established markets, and having an already established customer base to sell product to. I see this as a major point of the article. Also, according to the article, India has a "competitive edge" due to their lower cost of production. They have an advantage in what is known as "generic drugs" accounting for 20 percent of global market. A third main point is that their hypothesis was correct. "Indian pharmaceuticalists experience positive abnormal returns surrounding announcement of foreign acquisition." For shareholders in this industry, thus this research is a great marketing tool for those looking to get into their business. Overall, I think research like this is necessary to identify global trends, so those who wish the expand or collaborate in their industry have the ability to do so. It also is a great tool for governments to discover and prevent any monopolistic behaviors.

Reply postings that are limited to "I agree" or "Great idea" are not specific enough. If you agree or disagree with a posting, you must explain why. Further, merely stating that you said the same/opposite thing in your original post is not adequate explanation. You must add new thought leadership to a conversation thread.

Question: Identify a critical fact presented in the your classmate's comment or missing from your classmate's comment that prompted your agreement or disagreement.