Shire Pharmaceuticals Group's Acquisition of Biochem Pharma: Broadening Product Portfolio and Achieving Economies of Scale in Pharmaceuticals

Throughout the world, pharmaceutical companies were merging in order to achieve economies of scale in all of their activities, from research and product development through to distribution and marketing. While BioChem had several successful products and a track record of rapid expansion, nevertheless, in this new global environment it was now necessary for BioChem to achieve economies of scale through a consolidation of some type. The U.K. firm Shire was approximately the same size as BioChem, and faced the same dilemma. In a sense, Shire's acquisition of BioChem was a merger rather than a takeover and both corporations could achieve a unified global strategy that was beyond the means of each individually.