Global giant VNU acquires IMS Health for $7 billion
pharmafile | August 17, 2005 | News story | Sales and Marketing |Â Â Â
Dutch media, consumer and marketing information group VNU has bought IMS Health for $7 billion, as it looks to expand into a more profitable area of the market after struggling to meet core revenue targets.
VNU's acquisition of the Connecticut-based pharmaceutical data consultants will see it nearly double in size and allow it to meet a growing demand for up-to-the-minute global sales data on prescription drugs.
It will also strengthen VNU's position in the lucrative US market, where around 40% of IMS's revenue is generated through selling sales data to manufacturers and analysts.
"The merger of two industry leaders gives us the scale and capabilities to meet growing client demand for the must-have market intelligence that drives critical business decisions," commented VNU's chief executive officer Rob van den Bergh, who will be CEO of the combined company.
The deal is expected to be completed in early 2006 – subject to shareholder approval – and the new entity will be the leader in three sectors: consumer packaged goods, healthcare and media.
For IMS, the deal will provide it with the financial clout and global reach to expand its services and capitalise on shared data assets.
It will also enable it to deepen its understanding of things like how healthcare decisions are made and why doctors prescribe certain drugs more than others, augmenting its core function of prescription sales data.
"Our companies know each other well and are already working together successfully in various markets around the world," said IMS chief executive officer and president David R Carlucci, who will become chief operating officer of the new company.
"As a company, we will benefit from financial strength, an impressive list of blue-chip clients, broad consulting and service capabilities, and global reach. This is a strategically compelling transaction that provides real value to clients, employees and shareholders in both the near and long-term, as well as exciting opportunities for growth."
VNU's core market research unit, ACNielsen, has struggled to meet operating targets due to difficult European economic conditions.
It will be hoping that branching out into the healthcare arena and developing new products will alleviate pressure on its flagship market research unit.
The Dutch group owns a number of well-regarded publications, like Billboard and The Hollywood Reporter and has a significant presence in online media.
Operating in over 100 countries, IMS generated $1.6 billion in revenues last year and is the world's leading provider of pharmaceutical data to healthcare industries.
Upon completion of the merger, VNU will be led by a management team made up of executives from both companies.
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