Top 10 M&A Deals of 2014

Revived markets, inversions, and big pharma’s appetite for new therapies spur megamergers.

2014 could be a year for the history books. Many believe that we will never see another year with so many mergers and acquisitions. [© Yuri Arcurs –]

  • Just a few numbers show how far the value of 2014’s top deals involving biopharma mergers and acquisitions (M&A) has surpassed those of 2013: The biggest acquisition of 2014, at $66 billion, is more than four times that of 2013’s number-one (Thermo Fisher Scientific’s purchase of Life Technologies for $13.6 billion plus $1.5 billion in debt).

    The number of 2014 M&A deals exceeding $10 billion (five) is 2.5 times the two such deals that occurred in 2013, and the second deal barely surpassed eleven digits at $10.4 billion, the price Amgen paid for Onyx Therapeutics.

    Most importantly, the value of 2014’s top 10 M&A transactions reached a combined $179.05 billion—nearly three times the combined $66.4 billion of a year earlier.

    How did M&A deals get so huge? The revival of the financial markets, plus buyers’ willingness to pay big for new treatments, pushed M&A activity to new heights. So, too, did the trend of U.S. biotechs scrambling to slice their tax bills through “inversion” mergers with European partners—though the U.S. Treasury Department dampened that stampede somewhat through new regulations

    The new anti-inversion rules claimed two other megadeals. One of them would have made this list had it not fallen through: AbbVie’s aborted nearly $52 billion purchase of Shire. The other deal was Salix Pharmaceuticals’ planned merger with Cosmo Pharmaceuticals, which at $2.7 billion would have missed the list by a wide margin, coming in as only the 18th largest M&A deal of 2014. (A third megadeal, Pfizer’s ill-fated $116 billion attempt to buy AstraZeneca, ran afoul of opposition from the takeover target as well as the U.K. government of Prime Minister David Cameron, which sought guarantees that the buyer would not eliminate jobs and operations in the kingdom).

    So large are this past year’s mergers and acquisitions that the 11th largest deal narrowly missed this list despite its value of about $5.3 billion—Mylan’s purchase of Abbott Laboratories’ non-U.S. developed markets specialty and branded generic drug business. A deal that size would have ranked at No. 6 in 2013.

    Finally, what about next year? Veteran industry observer G. Steven Burrill, CEO of Burrill LLC and Burrill Media, said December 16 that he doesn’t foresee 2015 being an even hotter year for mergers and acquisitions, or initial public offerings for that matter: “The unprecedented IPO and M&A activity this year will make 2014 one for the record books and unlikely to ever be surpassed.” Whether Burrill’s caution proves to be prudent remains to be seen.

    Below is a list of 2014’s top 10 largest M&A deals disclosed in 2013 by drug developers, tools/tech companies, and CROs, ranked by deal value in U.S. dollars. Each acquired company is listed along with its acquirer or prospective acquirer, the price, and the status of the deal.

  • #10. Novartis—Animal Health Division

    Acquired by: Eli Lilly

    Price: Approximately $5.4 billion

    Deal status: Announced April 22. On December 22, Lilly agreed to sell its Sentinel product line of medications for treating heartworm disease in dogs, and associated assets, to Virbac, in order to settle a complaint by the U.S. Federal Trade Commission that the transaction with Novartis was anticompetitive and would lead to higher prices. The deal is expected to close by the end of the first quarter of 2015.

  • #9. Questcor Pharmaceuticals

    Acquired by: Mallinckrodt

    Price: Approximately $5.8 billion

    Deal status: Completed August 14

  • #8. InterMune

    Acquired by: Roche

    Price: $8.3 billion

    Deal status: Completed September 29

  • #7. Novartis—Vaccines Business (excluding flu products)

    Acquired by: GlaxoSmithKline (GSK)

    Price: Up to $8.85 billion (1) (2)

    Deal status: Announced April 22. On December 18, GSK shareholders at a General Meeting approved a series of transactions with Novartis that included the acquisition of Novartis’ vaccines division. The deal is expected to close during the first half of 2015. Not included were Novartis’ flu products, which the pharma giant agreed to sell separately to CSL for $275 million.

  • #6. Cubist Pharmaceuticals

    Acquired by: Merck & Co.

    Price: $9.5 billion (3)

    Deal status: Announced December 8. On December 19, Merck began its cash tender offer to purchase all outstanding shares of common stock of Cubist. The deal is expected to close in the first quarter of 2015.

  • #5. Merck & Co.—Consumer Care Business

    Acquired by: Bayer

    Price: $14.2 billion (4)

    Deal status: Completed October 1.

  • #4. GlaxoSmithKline—Oncology Business

    Acquired by: Novartis

    Price: Up-to-$16 billion (5)

    Deal status: Announced April 22. On December 18, GSK shareholders at a General Meeting approved a series of transactions with Novartis that included the sale of GSK’s oncology business to Novartis. The deal is expected to close during the first half of 2015.

  • #3. Sigma-Aldrich

    Acquired by: Merck KGaA

    Price: $17 billion

    Deal status: Announced September 22. On December 5, Sigma-Aldrich said that its stockholders voted to adopt the merger agreement providing for the acquisition. The deal is expected to close “in mid-2015.”

  • #2. Forest Laboratories

    Acquired by: Actavis

    Price: Approximately $28 billion

    Deal status: Completed July 1.

  • #1. Allergan

    Acquired by: Actavis

    Price: $66 billion

    Deal status: Announced November 17; expected to close in the second quarter of 2015.