Merck & Medco “The Merger”

For 102 years of innovations, our company has thrived in the health-care arena and overcome the challenges and changes in the industry. Our researchers have helped the people around the world by finding new ways to treat and prevent illness and create healthier and brighter future for all people around the world. Today, Merck is the world’s largest drug manufacturer, thanks to the vision of the former management and directors who were able to see in the future and overcome all obstacles and competition and positioned the company as world leader.
Ladies and gentlemen of the board, we are experiencing a rapid change in the industry of health-care and a different dynamic induced by the fierce competition not only in the U.S. but also all over the globe. Falling drug profits and increase spending in research and development are challenges that we have to face. As a result, analysts and CEOs in health-care share my view that there will be only few big drug makers left in the global market. Therefore, it is my job to find opportunities and growth to maintain our leadership and role in the industry and maximize our shareholders’ wealth.
Merck’s acquisition of Medco is a bold step that will be the initiation of new era that will reshape the health-care industry and many rivals will follow in the future. After discussion with our top executives who casted their views and concerns over the merger. I have gathered information that weighed on my proposal and recommendations. There are several factors to consider in evaluating the cost and benefits of this vertical transaction that I will discuss after a brief description about the target firm.
Medco is a leader in prescription benefits management PBM and mail-order drugs; it has about 33 million customers in the US which accounts to 26% of all patients covered by a benefit plan and manages 95