In my opinion, Valeant must be thinking it will sell the surgical lines to pay down some debt. It cannot run the combined businesses, intact -- with as low as a 20 per cent S, G & A line, for the longer haul. Here is a bit of the Bloomberg story on it -- do go read it all:
. . . .Valeant will have about 18,000 employees once the deal is completed, Pearson said. The number of jobs that may be eliminated to reduce overlap and duplication hasn’t been determined, he said. Bausch & Lomb spends about 40 percent of revenue on selling, general and administrative expenses and Valeant aims for about a 20 percent ratio, Pearson said.
“There’s many, many non-personnel savings here as well,” Pearson said. “We can get better distribution fees in different markets. There’s a lot of purchasing synergies. There’s a lot of real estate synergies. . . .”
Pretty sad for the employees -- of both companies. No matter how the debt in the deal gets allocated, Alcon is still much larger than the combined companies, in eye-care. With Novartis behind the Alcon brands, and J&J also ahead of the combined companies in scale and scope -- this is a very tough road, ahead -- to win on price competition. The combined businesses just won't have J&J's, or Alcon's scale.
2 comments:
Hmmmmm wonder if Alex Kelly will beg for his old job back at Merck. LOL!
Hey Anon. -- I had the very same thought!
He's now in a "Thunderdome" match -- "two entered; one leave!" For that lead press relations job, against the Valeant incumbent... Wow!
Namaste
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