A few years ago, BCG was working with the Animal Health division of Boehringer Ingelheim (BI), the world’s largest family-owned pharmaceutical company, to help the division strengthen its growth strategy, when an unexpected opportunity emerged. It was a perfect fit with key elements of that strategy — a push to strengthen the division’s presence in North America, Canada, and Australia and further expand its position in the animal vaccine segment.

The auspicious opportunity came about as a result of a merger that was in the works between two other pharma companies. In order to clear the way for its mega-merger with Wyeth, Pfizer, Inc. was going to be required by the U.S. Federal Trade Commission and anti-trust authorities in other jurisdictions to divest parts of Wyeth’s animal health business (Fort Dodge Animal Health), due to significant overlaps with Pfizer’s own animal health business.

The opportunity this presented for Boehringer Ingelheim checked most of its strategic boxes. If BI could win the divestment, it would significantly strengthen its position in the U.S. and in selected other global markets. It would also mean that BI could further expand and reinforce its vaccine expertise across animal species.

The Pfizer-Wyeth merger was on the clock, so things had to happen very fast. This deal was governed more by its complexity than by its size.  It would require the carve-out of the divested product portfolio as well as the management and integration of a complex production network and of a thicket of intellectual property assets. On top of that, BI’s managers would have to be equipped to run the acquired parts of the business as of the closing date, to smoothly handle any discontinuities — from potential loss of knowledge to the transfer of key employees and customer relationships.

BI hired BCG to provide support with the due diligence, contract negotiations, and the post-merger integration to ensure a smooth transition at closing and beyond. BCG, with deep, years-long buy-side experience across many industries, quickly helped set up the organizational machinery to gear up BI as the intended winner of Pfizer’s auction of Wyeth’s animal health assets. Our buy-side team was on board from beginning to end of the deal, from earliest due diligence to the final stages of post-merger integration. BCG also helped develop and orchestrate a successful approach to the anti-trust authorities that were closely tracking the Pfizer-Wyeth merger.

The buy-side team worked with a large team from all across the BI organization – including finance, legal, commercial, and manufacturing. Throughout, BCG put its analytical rigor to work to define, establish, and drive the multiple work streams needed to manage every aspect of the bid, to handle commercial due diligence on extremely tight timelines, and to communicate continually to all parties.

The deal was a major strategic leap for BI, doubling its business in the U.S., increasing its global animal health revenues by 30 percent, and moving it from seventh to sixth place in the global animal health market. The company now has one of the strongest portfolios and pipelines in the sector.

And at least as importantly, BCG supported the development of M&A capability at BI and passed on key M&A methodologies and approaches to the BI team for future use.

Deal Outcomes

  • Boehringer Ingelheim had end-to-end support from BCG with disciplined due diligence, contract negotiations, and post-merger integration to ensure a smooth transition at closing and beyond.
  • Boehringer Ingelheim’s managers were equipped to run the acquired parts of the business as of the closing date, and to smoothly handle any discontinuities — from potential loss of knowledge to the transfer of key employees and customer relationships.
  • The fast-track acquisition led to a major strategic win for Boehringer Ingelheim. The company doubled its business in the U.S., increasing its global animal health revenues by 30 percent. The company now has one of the strongest portfolios and pipelines in the sector.
  • Boehringer Ingelheim gained much stronger M&A capabilities, including methodologies and approaches that it could apply to future M&A initiatives.