1. The Impact of Communication on
Mergers and Acquisitions in Life
Sciences
Case Study and M&A Communications Practices
of the Pfizer-Wyeth Acquisition
By Valeria Piras
M.S. in Public Relations and Corporate Communication
New York University, School of Professional Studies
Adviser: John Deats
December 2015

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ABSTRACT
The purpose of this research is three-fold. First, understand how strategic communication
can impact the business outcomes of merger and acquisition (M&A) deals. Second, how
communication can emphasize the clinical value of M&A deals in the pharmaceutical
industry. Third, how communication can impact the reputation of a pharmaceutical
provider that engages in M&A deals to develop life-saving medications. With this in
mind, the paper will provide valid and useful recommendations on how management can
identify and overcome communication pitfalls during corporate collaborations in the
pharmaceutical industry. Due to predetermined limitations and the scope of this capstone
paper, source material has been carefully selected and evaluated to determine relevance.
The introductory chapter provides an overview analysis of M&As as strategic means for
companies to seek new business opportunities, as well as an overview of existing
predominant trends in the M&A sector within the United States’ pharmaceutical industry.
Subsequently, the researcher introduces the Pfizer-Wyeth acquisition of 2009 – only case
study in this capstone paper – and further provides a brief summary of Pfizer M&A
activity from 2000 to 2011. Chapter 1 also includes a background analysis of both
business and clinical value of corporate collaborations in the pharmaceutical industry, as
well as the influence strategic and open communications exert on key stakeholders,
including shareholders.

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Chapter 2 focuses on the theoretical framework as foundation of this paper, listing a wide
range of relevant theories, concepts, and resources from established theorists, academics
and practitioners, including Dr. W. Edwards Deming, Jim Collins, Clampitt, DeKoch,
and Cashman, and Dooley and Garcia. Giving the fact that M&A communication helps
management achieve business goals, constitutes a division of change communication, and
has tangible effects on the reputation of a company, three categories of theories provide
structure to the comprehensive topic. The categories are: theories on management,
theories on change communication, and theories on reputation.
After the theoretical investigation, Chapter 3 explores the methodology used to dissect
the topic of this capstone paper. In-depth interviews with a Pfizer’s senior executive and
two former Wyeth’s executives, along with an extensive media coverage research and a
comparative financial analysis of the Pfizer-Wyeth transaction, provided a broad
spectrum of the communication and reputation challenges Pfizer faced during the
takeover of Wyeth. Following the methodology, Chapter 4 evaluates the findings for each
of the aforementioned sections.
Finally, drawing conclusions from the theoretical resources applied to the Pfizer-Wyeth
case study, and the primary and secondary research findings, the researcher provides
recommendations and suggestions as to how management should communicate during
takeover transactions.

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TABLE OF CONTENTS
1. INTRODUCTION .......................................................................................................... 5
1.1 Consolidations in the U.S. Pharmaceutical Industry .................................................. 6
1.2 Pfizer’s M&A Activity and the Pfizer-Wyeth Acquisition ........................................ 7
1.3 Business vs. Clinical Value of M&As in the PLS Industry ....................................... 9
1.4 The Role of Communication in M&A Deals ............................................................. 9
2. THEORETICAL FRAMEWORK ............................................................................... 12
2.1 Theories on Management ........................................................................................... 12
2.2 Theories on Change Communication ......................................................................... 15
2.3 Theories on Reputation .............................................................................................. 17
3. METHODOLOGY ......................................................................................................... 19
3.1 Primary Research: Interviews with Pfizer and Former Wyeth’s Executives ............. 19
3.2 Secondary Research ................................................................................................... 21
3.2.1 Targeted Media ................................................................................................. 21
3.2.2 Trade Publications ............................................................................................. 23
3.2.3 Pfizer’s Stock performance ............................................................................... 25
4. RESULTS AND DISCUSSION .................................................................................... 27
4.1 Primary Research: Pfizer and Wyeth’s Perspective and Actions .............................. 27
4.1.1 Goals and Objectives ........................................................................................ 27
4.1.2 Tactics ............................................................................................................... 28
4.1.3 Audiences .......................................................................................................... 30
4.1.4 Key messages .................................................................................................... 33
4.2 Secondary Research: Targeted Media ........................................................................ 35
4.3 Secondary Research: Trade Publications ................................................................... 43
4.4 Stock performance: Pfizer-Wyeth Deal and Previous M&A Deals ........................... 44
5. CONCLUSION .............................................................................................................. 50
6. BIBLIOGRAPHY .......................................................................................................... 55
7. APPENDIX....................................................................................................................... 78

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1
INTRODUCTION
Globalism has had an impact on the way we do business and the corporate world in the
sense that it has led to a significant increase of global competition. The perception of
what is actually achievable in business has changed as well. Specifically, distances and
differences are not regarded as obstacles any longer, but rather as possibilities and
opportunities. Instead of being active in just one or few markets, organizations today
react to an increased global competition by expanding their product lines and
differentiating themselves, for instance. This results in a systematic change of their
organizational structure.
A wide range of strategies creates competitive advantage and allows companies to
strive in today’s business world. Outsourcing, reducing costs, corporate venturing, and
targeting new markets are just a few examples. However, merger and acquisition (M&A)
operations have rapidly become one of the most popular means to seek new business
opportunities and growth.
A rise in the number of corporate collaborations of $10 billion-plus in value and
an increase in cross-border transactions drove a 27 percent year over year increase in
global M&A activity in 2014. The factors that supported deal making in 2014 are likely
to be sustained in 2015, propelling a fresh round of M&A activity around the world
(Cristerna & Ventresca, 2015). However, many research studies conducted over the
decades show that M&A failure rate is at least 50 percent. Furthermore, surveys
conducted in recent years exposed how the percentage of companies that failed to achieve

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the merger goals reached 83 percent (Weber, Oberg, & Tarba, 2013). In addition, studies
indicate that one of the reasons organizations fail to achieve their business goals during
strategic consolidations is the lack of open, clear, and unambiguous communication
(Larsen, 2009).
1.1 Consolidations in the U.S. Pharmaceutical Industry
M&A activity in the pharmaceutical and life sciences (PLS) industry has increased in
recent years and it is expected to expand significantly during the next several years.
According to data collected by Thompson Reuters (2015), this year pharma deals have
reached $59.3 billion, a 94 percent increase over the same period a year ago, and the
highest value in any year since 2009. In addition, the current closed deal volume
increased from the prior quarter to 59 from 46 transactions Thus, consolidation continues
to be a trend in Q3 2015 across all sectors and geographies within the PLS industry
(Drone, Woods, & Bhagchandani, 2015, p. 1). Johnson & Johnson, Pfizer, and Novartis
are today the world’s largest drug and biotech companies as measured by profit, assets,
and market value (Forbes Global 2000, 2015).
Some of the most recent pharma transactions include AbbVie acquisition of
Pharmacyclics for $20.8 billion; Celgene Corp. acquisition of Receptos for $7.7 billion;
Pfizer acquisition of Hospira for $15.8 billion; and Teva Pharmaceutical Industries
announced acquisition of Allergan plc’s generic drug business for $40.5 billion (Drone,
Woods, & Bhagchandani, 2015, p. 5-6).

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1.2 Pfizer’s M&A Activity and the Pfizer-Wyeth Acquisition
Pfizer Inc. is an American multinational pharmaceutical corporation headquartered in
New York City, NY. According to its official online page, the company develops and
produces medicines and vaccines for a wide range of medical disciplines, including
immunology, oncology, cardiology, and neurology. Today’s Pfizer is the result of several
corporate collaborations, including four major strategic alliances sealed between 2000
and 2011. They are:
1. Warner-Lambert
Pfizer announced its intention to acquire Warner-Lambert for $98.31 per share or
$90 billion on February 7, 2000. The deal closed on June 19, 2000. As a result of
the acquisition, Pfizer gained consumer products Listerine mouthwash and
Sudafed cold remedy. In addition, Pfizer gained full control of Lipitor – a
blockbuster cholesterol-lowering drug the two companies jointly marketed – and
the male impotence treatment Viagra.
2. Pharmacia Corporation
On July 15, 2002, Pfizer announced its intention to merge with Pharmacia for
stock valued at $60 billion. On April 16, 2003, Pfizer and Pharmacia combined
operations. The merge was in part driven by the desire to acquire full rights of a
Pharmacia product, the blockbuster arthritis drug Celebrex. In addition, the newly
combined company would sell the cancer drug Camptosar. Sites closures and jobs
loss were some of the consequences of the reconstructing process.

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3. Wyeth Pharmaceuticals
On January 26, 2009, after more than a year of talks between the two companies,
Pfizer announced it would acquire Wyeth Pharmaceuticals for a combined $68
billion in cash, shares, and loans, including $22.5 billion lent by five major Wall
Street banks. The deal closed on October 15, 2009.
4. King Pharmaceuticals
On October 10, 2010, Pfizer announced the acquisition of King Pharmaceuticals
for $3.6 billion or $14.25 per share in cash. As a result of the agreement, Pfizer
gained a variety of abuse-resistant narcotics that complemented its own offerings.
A few examples were: morphine pill Embeda, medical patch Flector, and
emergency drug injector EpiPen. The deal closed on February 28, 2011.
This research paper focuses on the communication strategies Pfizer adopted during the
acquisition of Wyeth. The deal has been widely considered the largest pharmaceutical
deal in nearly a decade (Karnitschnig, 2009). On the one side, as a result of the
transaction, Pfizer consolidated its position as one of the world’s largest pharmaceutical
companies. On the other side, Pfizer gained from the transaction because Wyeth was
selling the pneumonia vaccine Prevnar and developing 10 treatments for Alzheimer's
disease. Ultimately, Pfizer obtained partial rights to the experimental Alzheimer's disease
treatment bapineuzumab.

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1.3 Business vs. Clinical Value of M&As in the PLS Industry
On the one side, there are many business and new development opportunities behind
consolidations, such as gaining competitive advantage, beating the competition, reaching
economies of scale, increasing a company’s market share and realigning a company’s
portfolio in a tough market. Today Pfizer is one of the world’s largest pharmaceutical
companies as measured by revenue. On the other side, strategic alliances in the
pharmaceutical industry can help companies develop new vaccines and cure life-
threatening diseases, including Alzheimer. However, due to the size of the Pfizer-Wyeth
deal, the media portrayed Pfizer negatively as “the shark that can’t stop feeding,”
(LaMattina, 2014) and “fat pharma.” (Wieczner, 2015). First, reporters focused their
attention on the fact that, by acquiring Wyeth, Pfizer eliminated a direct competitor.
Second, it took Pfizer several months to solve some issues with international antitrust
authorities after the deal was announced.
Generally speaking, investors, consumers, and regulators often have negative
perceptions toward consolidations in the pharmaceutical industry, when prominent
healthcare providers like Pfizer buy up competitors and become "pharmaceutical
behemoths.” In addition, consumer groups and regulators object that the increasing
number of pharma deals can hurt the national pharma industry by killing the competition
and driving up drug prices.
1.4 The Role of Communication in M&A Deals
The purpose of this research is three-fold. First, understand how strategic communication
can impact the business outcomes of M&A deals. Second, how communication can

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emphasize the clinical value of M&A deals in the pharmaceutical industry. Third, how
communication can impact the reputation of a pharmaceutical provider that engages in
M&A deals to develop life-saving medications. By analyzing the Pfizer-Wyeth
acquisition, this paper shows how different messages can change the way audiences
perceive a pharmaceutical provider and can trigger positive or negative reactions, which
have a direct impact on a company’s reputation.
Due to the increasing number of M&A transactions, the Security and Exchange
Commission (SEC) revised some rules to substantially eliminate existing restrictions on
oral and written communications with security holders and the market while promoting
free communication, as well as to protect investors by disseminating current transaction
information (Wells, 2002, p. 408). According to the revised SEC amendments (Final
Rule: Regulation of Takeovers and Security Holder Communications, 2000), companies
can communicate more freely with security holders about merits and risks of proposed
business combination transactions both before and after a registration, proxy or tender
offer statement is filed. The goal is to assist investors in making better-informed
decisions by increasing the flow of information and discouraging the dissemination of
misleading information into the market.
If the number of corporate collaborations is increasing, according to the Harvard
Business Review Report (2011) the failure rate of mergers and acquisitions is also going
up, ranging between 70 and 90 percent. Part of the reason is that too often business
consolidations fail to achieve the expected synergies and deliver increased value to
shareholders (Watson, 2011). The same report explains that, during a merger or
acquisition, not only two companies integrate into a new unified company, but also large

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groups of people are brought together with their own personalities, ambitions, behaviors,
and ways of working. Specifically, often management underestimates the importance of
managing culture integration well to improve M&A outcomes (Watson, 2011). Thus, it is
very important to have a clear communication strategy and open communications for all
stakeholders groups (Wadlow, 2015).
Two companies that agree to form a strategic alliance must also convince external
audiences, including shareholders, of the value of the deal. Over the past years,
shareholder activism has increased. When activists reveal their interest and “attack” a
company, they can exert a negative influence over the company’s suppliers, customers,
and employees. Transparency, clarity, consistent messaging, and two-way
communication are the best antidotes to activist scrutiny because they can mitigate the
risks of attracting shareholder activists and becoming an activist target (Drone, Woods, &
Bhagchandani, 2015, p. 9). Thus, companies should think more carefully about how they
plan on engaging with shareholders via more open forms of communication. For instance,
management needs to make a compelling case for why shareholders should invest in a
company, so that activists understand their perspectives and concerns (Drone et al., 2015,
p. 10).

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2
THEORETICAL FRAMEWORK
The definition of mergers and acquisitions encompasses three key concepts: business
management, organizational change, and reputation. First, strategic alliances involve
business decisions, require management expertise, and generate business outcomes.
Second, they also embrace the subject of organizational change and change
communication, when two companies need to persuade internal and external stakeholders
of the value of such change through communication. Lastly, M&A communication can
affect key stakeholders’ perceptions toward a company and, as a result, have an impact
on a company’s reputation. For these reasons, this research paper used theories on
management, communication change, and reputation.
2.1 Theories on Management
There are many business and new development opportunities behind consolidations in the
pharmaceutical industry, such as gaining competitive advantage, beating the competition,
and increasing the company’s market share. This paper examines the communications
techniques that impact business outcomes during strategic alliances, including the
importance of having clear goals and identifying the right audiences.
W. Edwards Deming (1986) offered managers 14 Principles of Transformation to
follow for improving the effectiveness of a company’s productivity. The 14 points later
launched the Total Quality Management (TQM) movement.

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The most relevant principles that apply to this research paper are the following:
1. Create common goals that lead to action;
2. Create a win-win situation that aligns the interests of all stakeholders;
3. Set the stage for continuous improvement;
4. Communicate effectively to root out fear, jealousy, anger, and revenge.
As argued by Dr. Deming, an organization should not only define clear goals for
management, but also create an environment where goals and interests of all stakeholders
are aligned, actively pursued, and achieved. Management consultant Peter F. Drucker
(2008) agreed that common goals must be simple, clear, and constantly reaffirmed, and
that there is no business without stakeholders (1954).
On the one hand, Dr. Deming recommended management not to focus on short-term
profits, which can be achieved by deferring maintenance and cutting research. On the
other hand, long-term planning and long-term profits are ideal and they can be achieved
by improving quality. However, defining goals alone is not sufficient if managers fail to
identify strategies, because “Hopes without a method to achieve them will remain mere
hopes. (Deming, 1986, p. 19)” As a result, management must be both committed to
quality and know what to do to get it (Groberg, 2011).
In addition, management should set the stage for continuous improvement of quality
and productivity, which encompasses the concepts of transformation and change, with the
aim to become competitive, stay in business, and provide jobs. Ultimately, effective two-

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way communication roots out the four detriments: fear, jealousy, anger, and revenge.
This can lead to mutual trust, confidence and respect (Neave, 1987).
The concepts of continuous improvement and change were not new to Deming. In the
early 1950s he developed the Deming Wheel – also called PDCA cycle or Shewart cycle
– that was first introduced by his mentor, Walter Shewart, in the early 1920s. The
Deming Cycle is a four-stage change management model used by companies for
continuous business improvement. The cycle begins with the “Plan” step, where
management identifies a goal and processes metrics. This stage is followed by the “Do”
step, where the plan is implemented and translates into action. Next comes the “Study”
stage, where outcomes are monitored to identify signs of progress and success. Lastly, the
“Act” step integrates the learning generated by the entire process to adjust the goal or
change methods (Deming, 1950).
Another interesting point of view on the concept of change comes from author and
leadership teacher Jim Collins (2001), who demystified popular myths believed to drive
change and lead to greatness. According to Collins, a few myths are:
 The Myth of the Change Program, which includes the launch event and the tag
line;
 The Myth of Stock Options, which includes high salaries and bonuses as
incentives;
 The Myth of Fear-Driven Change, which includes the fear of being left behind,
and the fear of watching others win;

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 The Myth of Acquisitions, which refers to the belief that an organization can buy
its way to growth and greatness.
According to the author, great companies do not transform from good to great
overnight. Instead, greatness derives from a gradual and consistent transition.
Specifically, the majority of change programs and motivational stunts fail to achieve
credibility because they lack accountability instead of showing step-by-step successes so
that stakeholders can gain confidence. In addition, companies fail to build sustained
momentum by launching change programs and repetitively changing direction:
disappointing results lead to reactions without understanding, which lead to a new
direction, a new leader, and a new program, which lead again to disappointing results.
Ultimately, acquisitions cannot provide a stimulus for greatness because two mediocrities
never make one great company but create only another mediocrity (Collins, 2001).
2.2 Theories on Change Communication
M&A consolidations create complex situations, and present both opportunities and
challenges for the executive team charged with leading the organization through the
transition (Fernandes, Knowles, & Roach, 2007). Some challenges may refer to
management and culture change, for instance.
Zorn, Page, and Cheney (2000) explored the concept of change from three
different perspectives: the functional, the romantic, and the critical. Each perspective
implicates different standards for evaluation and, as a result, highlights different change-
related communication practices. Thus, change must be communicated effectively to

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avoid negative consequences on the business environment. In addition, unplanned change
often originates from a lack of rich and open communication, which leads to a feeling of
uncertainty and anxiety (Miller, 2006).
During mergers or acquisitions, the communication strategies should evolve
alongside an organization’s goals. Most notably, Clampitt, DeKoch, and Cashman (2000)
identified five communication strategies: the right strategy is selected according to the
purpose. The following (Figure 6) is a graphic representation of the different
communication strategies.
Figure 6
In the “Spray & Pray” strategy, management showers the audience with all kinds
of information, expecting the audience to distinguish between important and unimportant
messages. The wrong assumption is that more information equals better communication.
“Tell & Sell” means that executives provide the audience with a limited set of messages
that they believe is important without fostering meaningful dialogue. The two wrong
assumptions are that the audience is a passive information receiver and feedback is not
necessary. On the one side, according to the “Identify & Reply” strategy, management

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focuses the attention on the public’s concerns. The wrong assumption here is that the
public is in the best position to know the critical issues involved. On the other side,
executives who adopt the “Withhold & Uphold” strategy do not want to share
information with anyone, assuming that information is power. As argued by the authors,
the ideal strategy is the “Underscore & Explore”. Executives using this approach focus on
organizational success, while listening to and accepting key stakeholders’ feedback to
recognize potential misunderstandings.
2.3 Theories on Reputation
M&A deals have a multi-dimensional impact on reputation. On the one hand, the
acquiring firm gains broader capabilities and expands its market reach. On the other
hand, some of the acquired firms’ employees might have to leave as a result of the
transaction or experience cultural differences in the newly combined company.
Additionally, the newly combined company might fail to meet customers and suppliers’
expectations (Edelman, 2015). Thus, a merger or acquisition poses significant reputation
challenges when the business transaction fails to increase shareholder value and
management rely only on projected cost savings from the elimination of redundant jobs
(Dumon, 2015).
Many authors have explored over the years the significance and the intrinsic value
of reputation. Some believe reputation is a derivative of other actions and behaviors of
the firm. Thus, it is difficult to isolate one variable that influences perceptions to a greater
degree than others across all stakeholders (Schultz, Moritsen, & Gabrielsen, 2006).
Others argued that reputation is the collective representations shared in the minds of

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multiple publics about an organization over time and is developed through a complex
interchange between an organization and its stakeholders (Grunig & Hung, 2002). But
reputation is not only made of intangible representations. Instead, it can be calculated
through the following formula:
REPUTATION = SUM OF IMAGES =
PERFORMANCE + BEHAVIOR + COMMUNICATION
Good reputation is an asset with both intangible and tangible values. Specifically,
reputation is an intangible asset with great tangible values, such as attracting better
employees and increasing profits, for instance. As a result, reputation can be measured
and all its components – performance, behavior, and communication – should be
managed on an on-going basis through a long-term strategy (Doorley & Garcia, 2011, p.
4-5).
Just as people develop social capital to build relationships, corporations develop
reputational capital to grow (Doorley & Garcia, 2011, p. 4). Similar to human beings,
corporations have also intrinsic identities, which are made of what they stand for
(Doorley & Garcia, 2011, p. 6). The identity of a company is one of its most valuable
assets and should be carefully managed during M&A deals to avoid confusion and
instability, such as the domination of one identity over the other or, alternatively, the
development of a new identity from the newly combined company (Rosson & Brooks,
2002). Ultimately, a company can have multiple identities, as long as they are not
conflicting and there is a dominant identity (Cheney, 1991). In the case of the healthcare
industry, a pharmaceutical company can diversify its product line but should always
maintain a primary focus, such as R&D or product development, for instance

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3
METHODOLOGY
3.1 Primary Research: Interviews with Pfizer and Former Wyeth’s Executives
While it was important to do extensive industry research to better understand the
communication and reputation challenges Pfizer faced during the Wyeth transaction,
additional work was done to gather information.
Preliminary qualitative research was conducted via a series of in-depth interviews
(IDIs) to gain insight into what was Pfizer’s communication plan during the acquisition
of Wyeth. IDIs were conducted with Pfizer and former Wyeth’s senior executives who
were involved in the acquisition before and/or after the two healthcare providers made
the deal announcement on Monday, January 26, 2009. The sample was limited to three
interviewees, representing over 80 years of collective experience, with knowledge and
expertise in Media Relations, Corporate Communications, Financial Communications,
Research and Development, and Business Development at executive level. The
interviewees were:
 Current Senior Director and Head of Financial Communications, including
M&As, at Pfizer;
 Former Vice President for Corporate Communications at Wyeth Pharmaceuticals,
who was involved in the transaction before the public announcement;

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 Former Wyeth Vice President for Corporate Communication and former Wyeth
Chief Corporate spokesperson, who was involved in the transaction after the
announcement.
The interviewees shared Pfizer and Wyeth’s communication plan during the deal,
including targeted media, objectives, tactics, messages, and key audience, as well as
industry insights. They were provided the below questions over the phone:
1. Did you work in the Pfizer-Wyeth acquisition? If yes, what was your role? If no,
how informed are you of the acquisition?
2. Who was the audience that Pfizer was communicating to during that acquisition?
Who were the primary and secondary audiences?
3. What were the messages that Pfizer communicated to its stakeholders to convince
them of the value of the deal?
4. How many of those messages where included in the stories that Pfizer/Wyeth
created to emphasize the value of the deal?
5. What were the stakeholders’ reactions to those messages?
6. How effective were those messages?
7. What were Pfizer’s objectives in the communication plan and were those
objectives largely achieved?
8. Please, name some of the media outlets Pfizer focused on.
9. How was the public announcement coordinated?

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10. What communication tactics Pfizer adopted from the public announcement on
January 26, 2009, to the close of the deal in the U.S. on October 15, 2009?
11. If Pfizer was to acquire another Wyeth-like company, what is the key
communication learning from that transaction that you would consider for the
next one?
Additionally, IDIs tapped interviewees’ perceptions regarding the communication
challenges and their recommendations for success important in developing future M&A
communication plans in the pharmaceutical industry. Interviews lasted between 15
minutes and 30 minutes, and were audio-recorded and later transcribed.
3.2 Secondary Research
This research utilized quantitative and qualitative content analysis to examine the variety
of news and trade publications coverage available about the Pfizer-Wyeth acquisition. A
comparative financial analysis provided a robust overview of the reactions of the
financial community.
3.2.1 Targeted Media
The eight media outlets were selected for analysis based upon the fact that all three
interviewees confirmed Pfizer targeted these outlets for all external communications from
the day of the public announcement.
The news sources consisted of major national publications, as well as wire services,
and local New Jersey and Philadelphia media. The outlets were:

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 Business/financial media
o Dow Jones Newswire and Wall Street Journal
o The New York Times
o Financial Times
o Bloomberg
 Wire services
o Reuters
o Associated Press
 Local media
o The Star-Ledger (New Jersey)
o The Philadelphia Inquirer (Philadelphia)
An in-depth qualitative analysis of the news coverage from January 2009 to
December 2009 was gathered around three questions. First, which frames were most
salient in the targeted media outlets? Second, what was the overall media sentiment
toward the Pfizer-Wyeth acquisition? Third, what were the public perceptions toward
Pfizer during and after the acquisition? Additional articles, published after 2009, were
analyzed only if content was relevant to the subject of this capstone paper. To establish
media sentiment, the researcher labeled all collected news stories either as “positive”,
“neutral”, or “negative” depending upon the overall tone of the article. Positive articles
had to either describe a positive image of Pfizer or include at least one of the messages
communicated as part of Pfizer’s external communication plan; neutral articles had to
only report facts; negative articles did not contain any of Pfizer’s messages and

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underlined a negative consequence of the acquisition for at least one of Pfizer’s key
stakeholders.
This research utilized theories on management, theories on reputation, and
theories on change communication to analyze the content in the targeted media channels
for information that influences what key stakeholders think of Pfizer and the Wyeth deal.
As a result, a total of 124 articles from the aforementioned U.S. paper and online
publications were collected and analyzed for content and sentiment. To generate these
articles, the researcher typed in the search words “Pfizer Wyeth” into Factiva, ProQuest
Newsstand, and media outlets’ online databases. Furthermore, three pivotal dates linked
to the acquisition were used in conjunction with the search words:
1. January 26, 2009: Pfizer and Wyeth’s CEOs announce the deal during a press
conference;
2. July 20, 2009: Wyeth shareholders approve the deal;
3. October 15, 2009: U.S. antitrust officials approve the deal.
Keywords and search terms generated the list of articles the researcher reviewed for
relevance and sentiment.
3.2.2 Trade Publications
In addition to the news coverage, the researcher gathered quantitative and qualitative data
about the Pfizer-Wyeth transaction from four U.S. healthcare publications:

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 FiercePharma
 Media Marketing and Media
 Modern Healthcare
 Pharmaceutical Executive
The researcher selected the four trade journals for two reasons. First, the publications’
primary audiences are doctors and scientists, who were also a key audience during the
Wyeth acquisition. Second, these publications reported on M&A deals in the
pharmaceutical industry in the past and, therefore, they were likely to cover the capstone
subject.
The same key words used with the news coverage generated a total of 65 articles
from the aforementioned publications’ online databases. Content and sentiment of all 65
articles was analyzed based on theories on reputation for information that influences what
scientists and doctors think of Pfizer as related to the Wyeth deal. Two objectives drove
the qualitative analysis. First, what was the overall industry sentiment toward the Pfizer-
Wyeth deal? Second, what were the doctors’ perceptions toward Pfizer during and after
the acquisition of Wyeth?
Ultimately, the selected articles were published from January 2009 to December
2009. Additional articles were analyzed for content and sentiment only if content was
relevant to the Pfizer-Wyeth transaction. Pivotal dates used to narrow down the database
search were limited to the public announcement on January 26, 2009, and the close of the
deal in the U.S. on October 15, 2009. Previously considered dates referred to financial
events and, therefore, they were irrelevant to the trade journals’ audience.

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3.2.3 Pfizer’s Stock Performance
The researcher collected Pfizer’s financial data for analysis from Yahoo! Finance, an
online tool that provides financial news, data and commentary, including stock quotes,
press releases, and financial reports. Three objectives drove the financial analysis. First,
measure the impact of the public announcement and other aforementioned news related to
the Wyeth deal on the volatility of Pfizer’s stock price to see if the company’s
communications affected stock behavior. Second, evaluate shareholders and analysts’
reactions toward the acquisition from Pfizer’s stock price performance. Third, compare
Pfizer’s stock performance during the 2009 transaction with other major Pfizer’s M&A
deals to evaluate if Pfizer’s stock performed similarly or differently. Major M&A deals
taken into consideration for this research were the following:
 Pfizer – Warner-Lambert (2000)
Deal announcement: February 7, 2000
Deal close: June 19, 2000
 Pfizer – Pharmacia (2003)
Deal announcement: July 15, 2002
Deal close: April 16, 2003
 Pfizer – King Pharmaceuticals (2011)
Deal announcement: October 12, 2010
Deal close: February 28, 2011

26. 26
Both methodologies reflect a growing approach in finance literature to convert
qualitative information contained in corporate announcements into a quantifiable measure
and, as a result, gauge the effect of relevant corporate news on the market value of a
security. A few examples include Tetlock (2007), who employed a textual analysis
program to count negative words versus positive words; Feldman, Rosenfeld, Bar-Haim
and Fresko (2011) and Boudoukh, Feldman, Kogan and Richardson (2015), who
combined a more sophisticated dictionary-based sentiment measure with a tone-based
sentiment measure to better evaluate the relationship between stock price changes and
information.
In addition to official news, the researcher included in the financial analysis
market rumors and unofficial news because both can have as much impact on the stock
price as corporate announcements (Spiegel, Tavor, & Templeman, 2013). The difference
between the two is that rumors originate from the media and, therefore, cannot be
verified. Unofficial news that appears in the media has a source, often undisclosed
(TradeKing, 2015). Industry insiders and reporters and from the majority of targeted
media outlets and FiercePharma trade journal speculated about the Pfizer-Wyeth deal
days before the public announcement. According to Wyeth corporate VP (Post
Announcement), the news had an impact on Pfizer’s stock price because Wyeth stock
was going to be liquidated. The interviewee added that, when M&A deals take place, the
acquirer’s stock price drops because of all the costs involved in the transaction.

27. 27
4
RESULTS AND DISCUSSION
4.1 Primary Research: Pfizer and Wyeth’s Perspective and Actions
The pharma experts interviewed for this capstone paper provided valuable insights on
Pfizer’s communication plan during the acquisition of Wyeth. While the interviewees
agreed on the communication’s objectives, tactics, targeted media, and messages, there
was some disagreement about primary and secondary audiences. Additionally, two
executives out of three stated that the audiences’ responses were balanced and fair, and
Pfizer did not encounter any issues with the messages delivered. However, as this
research paper further develops in the section “Secondary Research: Stakeholders’
Behaviors and Sentiment,” media coverage and stakeholders’ sentiment toward the
Pfizer-Wyeth deal were mostly negative. Thus, while it would not be prudent to draw any
absolute conclusions from such a limited group of participants, the interviews showed a
potential disconnection between Pfizer and its audience.
The following sections summarize the IDIs’ findings and Pfizer’s communication
plan during the transaction.
4.1.1 Goals and Objectives
According Pfizer’s Senior Director and Head of Financial Communications, external
communication served as a tool to help Pfizer achieve the following business objectives:

28. 28
 Shareholder approval for the transaction;
 Regulatory approval for the transaction;
 Ability to cover the cost of the transaction ($68B);
 Close the transaction.
Both former Wyeth executives added that Pfizer and Wyeth’s primary goal was to
convince investors that the deal made sense and it would bring value to shareholders of
both companies. In addition, according to Wyeth corporate VP (Post Announcement),
additional Pfizer’s objectives addressed Wyeth’s employees who were going to lose or
keep their jobs as a consequence of the acquisition. Specifically, those objectives were:
 Create a feeling that Pfizer would help all former Wyeth employees land on their
feet;
 Welcome Wyeth employees at Pfizer and create a feeling that Pfizer appreciated
their talents.
4.1.2 Tactics
During takeover transactions in the United States, the acquirer and the acquired firm must
follow specific regulations set by the Security and Exchange Commission (SEC). On the
basis of such regulations, the deal is announced publicly first, and all other
communications follow thereafter. Specifically, under the SEC terms, companies must
file all written communications regarding the transaction beginning with the first public
announcement. The Commission (2000) provided the specific definition of public

29. 29
announcement, which encompasses “All communications that put the market on notice of
a proposed transaction.... by a party to the transaction or any person authorized to act on a
party's behalf, that (are) reasonably designed to, or (have) the effect of, informing the
public or security holders in general about the transaction.”
According to former Wyeth corporate VP (Post Announcement), Pfizer sent out a
press release around 6 AM Eastern Time on January 26, 2009. Simultaneous to that, all
employees at both Pfizer and Wyeth were notified via email. At Wyeth headquarters in
Madison, New Jersey, there were also video monitors set up at strategic locations where
employees were able to see a video message from Mr. Bernard Poussot, former Wyeth
CEO, and Mr. Jeff Kindler, former Pfizer CEO.
At 8:30 AM senior executives from both companies conducted an analyst and
investor conference call/webcast to discuss the proposed combination. The webcast was
made available on the investor relations sections of the two companies’ websites. In
addition, a national and international dial-in number was provided.
Pfizer’s Senior Director confirmed Mr. Kindler and Mr. Poussot held a press
conference at 10 AM on the same day at Pfizer’s corporate headquarters in New York
City with television cameras and reporters from key media outlets, including Wall Street
Journal, The New York Times, Financial Times, Reuters, Dow Jones, Bloomberg,
Associated Press, New Jersey media, and Philadelphia media. As a result, as one of the
two former Wyeth’s executives explained, during the course of the day external
audiences were exposed to the coverage from the mainstream media. According to this
interviewee, Pfizer and Wyeth chose to hold the conference at Pfizer’s headquarters
because it was a centralized location, and easily accessible by the media.

30. 30
Former Wyeth corporate VP (Post Announcement) stated that there were also
letters sent from field sales forces for both companies to their customers. These letters
notified customers of the acquisition, underlining the fact that the deal was not going to
affect existent business relationships. The interviewee also confirmed that, after the
public announcement, Pfizer released a proxy statement to delineate the details of the
acquisition, and what the transaction meant from an evaluation and stock price
standpoint.
Ultimately, former Wyeth corporate VP (Pre Announcement) added information
about a joint interview with Jeff Kindler and Bernard Poussot broadcasted on CNBC
“Squawk Box” the day of the announcement. The interview began with former CNBC’s
pharmaceuticals reporter Mike Huckman discussing the Pfizer-Wyeth deal with Credit
Suisse Analyst Catherine Arnold. After that, Pfizer and Wyeth’s CEOs made the case that
the transaction was a great deal for shareholders of both companies.
4.1.3 Audiences
According to Pfizer’s Senior Director, there was no differentiation between primary and
secondary audience because all stakeholders had equal importance. They were:
 Shareholders
 Employees
 Patients and healthcare providers
 Government officials
 Grading agencies

31. 31
 Media
 Unions
However, both former Wyeth executives asserted that the focus prior and after the
January announcement was heavily weighted toward the financial community first,
including investors, analysts, and shareholders. Additionally, former Wyeth corporate VP
(Post Announcement) broke down the audience into the following two main categories:
 External Audience
1. Shareholders, analysts, and media
2. Doctors and patients
 Internal Audience
1. Wyeth employees
On the one hand, according to the interviewee, the primary external audience was in fact
the financial community, including Pfizer and Wyeth’s shareholders and analysts. In
addition, the media had the same level of importance. The three executives agreed that
Pfizer focused on the following key media outlets for the communications directed to key
stakeholders:
 Business/financial media
o Dow Jones Newswire and Wall Street Journal
o The New York Times

32. 32
o Financial Times
o Bloomberg
 Wire media services
o Reuters
o Associated Press
 Local media
o The Star-Ledger (New Jersey)
o The Philadelphia Inquirer (Philadelphia)
After shareholders, financial analysts, and the media, the second sub-category of the
external audience were people who were prescribing and using Pfizer’s products: doctors
and patients.
On the other hand, the internal audience category included Pfizer and Wyeth’s
employees – 83,400 and 46,000 respectively, according to Pfizer’s data – and their
families. A distinction occurred between Wyeth’s employees who were going to lose
their jobs and those who were going to keep their jobs as a consequence of the
acquisition. According to the same interviewee, such audience was more critical to
address because all Wyeth’s employees, both in the United States and around the world,
were going to be affected by the acquisition in some way. In the next section I will
provide more details about the different messages Pfizer sent to the internal audience.
Ultimately, Wyeth corporate VP (Post Announcement) added that Pfizer was also
particularly focused on legislators who represented the communities where Pfizer and
Wyeth’s facilities were located.

33. 33
4.1.4 Key Messages
According to Pfizer’s Senior Director and Head of Financial Communications, the
messaging was universal. However, messages were tailored so that they would be
appropriate for each audience. The interviewee revealed that Pfizer communicated the
following message from the day of the public announcement of the Wyeth transaction:
 We are best positioned to deliver shareholder value;
 The new company can promote health and wellness, and respond more efficiently
to the needs of patients around the world;
 The acquisition can guarantee flexibility and scale;
 The combined company will be a leader in human health, animal health, and
consumer health.
The interviewee added that Pfizer used all the above messages to emphasize the value of
the deal. Wyeth corporate VP (Post Announcement) stated that all messages were
positive.
Additional messages were:
 This transaction is in the best interest for shareholders and it will bring value for
shareholders;
 The Wyeth’s products that Pfizer was acquiring are going to help Pfizer grow
over time;

34. 34
 After all the regulatory requirements are met, Pfizer will go back to a better
business than usual, and there will be no negative impact on the audiences.
The interviewee added a distinction between messages communicated to Wyeth’s
employees moving on to Pfizer, and other messages for Wyeth’s employees who were
going to lose their jobs as a consequence of the acquisition. According to the interviewee,
the first set of messages focused on showing appreciation and gratitude. They were:
 Thank you for your work and contribution: you are the leaders who helped Wyeth
become a strong-enough company that Pfizer wanted to acquire;
 There are new opportunities ahead of you: all your talents are welcomed and
appreciated at Pfizer.
The second set of messages focused on showing remorse and sorrow for Wyeth
employees who had to leave their positions, and appreciation for the contribution they
made. The messages were:
 The remaining infrastructure is here to help you land on your feet;
 The remaining infrastructure is here to help you discover opportunities someplace
else.
According to the press release sent out on January 26, Pfizer complimented its
employees for their talents, which allowed the newly combined company to advance to

35. 35
the next level. The researcher did not find any additional messages communicated to
Pfizer’s employees.
4.2 Secondary Research: Targeted Media
After scanning for relevance, 124 articles from the eight targeted media outlets (Dow
Jones Newswire and Wall Street Journal, The New York Times, Financial Times,
Bloomberg, Reuters, Associated Press, The Star-Ledger, The Philadelphia Inquirer) were
analyzed for content and sentiment. First, to determine relevance, all articles had to either
mention the Pfizer’s acquisition of Wyeth throughout the text, or refer to a specific
situation that would not have taken place if Pfizer had not acquired Wyeth. Second, the
same articles were analyzed for sentiment to see how the media reacted to the acquisition
and the quality of media coverage that influenced key stakeholders.
The following graphic (Figure 1) shows the number of news articles about the
Pfizer-Wyeth deal attributed to each newspaper.
Figure 1
11%
26%
3%
9%
19%
11%
16%
5%
/Dow Jones Newswire and Wall
Street Journal (13)
The New York Times (32)
Financial Times (4)
Bloomberg (11)
Associated Press (24)
Reuters (14)
The Star-Ledger (20)

36. 36
The majority or articles analyzed came from The New York Times (32). Following
this, the Associated Press published 24 articles; The Star-Ledger and Reuters’ reporters
wrote 20 and 14 articles, respectively; Dow Jones Newswire and Wall Street Journal fell
slightly behind with 13 articles; Bloomberg published 11 articles; The Philadelphia
Inquirer’s staff wrote six, and four articles came from Financial Times.
Articles were also coded according to the three pivotal events in which they were
published. The following graph (Figure 2) shows the number of news stories found and
analyzed for relevance to each pivotal event.
Figure 2
The researcher collected 21 articles that reporters from the targeted media outlets
wrote on January 26, 2009, which was the day of the public announcement. On July 20,
2009 – the day Wyeth shareholders approved the transaction – only five articles were
found and analyzed. Lastly, the researcher collected nine articles published on October
21
5
9
0
5
10
15
20
25
01/26/2009 Deal announcement
07/20/2009 Wyeth shareholders
approve the deal
10/15/2009 U.S. antitrust officials
approve the deal

37. 37
15, 2009, when the Federal Trade Commission (FTC) cleared the deal. This is a 57
percent decrease in media coverage compared to the public announcement.
After completing the quantitative analysis, the total media coverage from January
2009 to December 2009 was evaluated for quality. Specifically, the objective was to
determine the overall media sentiment, which influenced the audience’ perceptions of
Pfizer. The following graph (Table 1) provides the number of negative, neutral, and
positive articles about the Pfizer-Wyeth transaction that were written during the given
timeline. As we can see, the overall media sentiment was predominantly negative and
neutral. Specifically, approximately 66.6 percent of the total number of analyzed articles
was negative and neutral, compared to only 33.4 percent of positive news coverage.
Table 1
J F M A M J J A S O N D TOTAL
Negative 16 5 2 2 1 1 0 0 0 4 5 0 34
Neutral 18 0 1 0 1 2 0 0 0 4 1 0 26
Positive 10 0 0 2 1 0 3 0 1 8 2 1 30
TOTAL 44 5 3 4 3 3 3 0 1 16 8 1 90
If we extend the timeline to include news articles from 2009 through 2014 (Table
2), we can see a wider gap between negative (56) versus positive (37) news stories.
Table 2
2009 2010 2011 2012 2013 2014 TOTAL
Negative 34 11 4 2 1 4 56
Neutral 26 4 1 0 0 0 31
Positive 30 5 0 0 2 0 37
TOTAL 90 20 5 2 3 4 124

38. 38
Furthermore, as shown below (Figure 3), there was a minor 35 percent drop in
negative media coverage from 2009 to 2014, compared to a much larger decrease in both
neutral and positive media coverage during the same period (81 percent and 77 percent,
respectively). Hence, negative media coverage about the Pfizer-Wyeth acquisition was
still predominant compared to positive media coverage.
Figure 3
The next sections will provide both a quantitative and a qualitative analysis of the
media coverage for each of the targeted media outlets.
Dow Jones Newswire and Wall Street Journal
The researcher collected and analyzed for relevance and sentiment 13 news stories
published from 2009 to 2014. The first article, dated January 23, 2009 – three days before
the public announcement – reported neutral rumors about the acquisition. A former
34
22
26
5
30
7
0
5
10
15
20
25
30
35
40
2009 2010-2014
Negative
Neutral
Positive

39. 39
Wyeth executive confirmed that a reporter from Wall Street Journal called on that day to
ask for comments. Four news stories had negative sentiment toward the acquisition in
2009, which is double the amount of positive news articles. From 2010 to 2014 the
researcher collected and analyzed four negative news stories, compared to only one
positive.
In 2009 negative stories mostly focused on analysts and shareholders’ doubts if
the combined “behemoth” would be able to generate enough growth and cover the costs
of the acquisition; and negative consequences of the acquisition’s cost-saving tactics,
including job losses and research labs’ closures. After 2009, negative news stories
focused on the loss of patent protection on drugs and the improper marketing of drugs
from the Wyeth unit. Both aspects had a negative effect on Pfizer’s shareholders and the
financial community.
The New York Times
The researcher collected and analyzed for relevance 28 articles published between 2009
and 2012. Among these articles, 14 reflected negative media coverage, compared to only
six positive news stories. In January 2009, at the time of the public announcement, the
researcher found 10 neutral articles, four negative, and only two positive articles. Three
stories covered neutral rumors about the acquisition three days before the public
announcement. On the day of the announcement, the researcher found five neutral stories,
four negative stories, and only two positive stories. Between 2010 and 2012, the media
outlet’s reporters wrote six negative news stories about the Wyeth acquisition’s
consequences, compared to only one positive.

40. 40
Negative articles mostly covered consequences for Wyeth’s work force, such as
jobs cutting, and for Pfizer’s shareholders, including decreased dividend, lower stock
price, and several on-going federal investigations inherited from Wyeth. The few positive
news stories covered the U.S., Canada, Chinese, and Australian regulatory approval of
the deal, and the fact that several hedge funds were buying shares of Pfizer.
Financial Times
The researcher collected and analyzed for relevance four articles published between 2009
and 2010. The media coverage was balanced, with only one negative article and one
neutral article. The two positive stories included quotes from Pfizer’s CEO and other top
executives.
Bloomberg
The researcher collected and analyzed for relevance 11 articles published in 2009. The
media coverage was balanced here as well, with four negative, four positive, and three
neutral articles. Positive articles included Pfizer’s quotes, and covered that the acquisition
of Wyeth would save Pfizer from the loss of patent protection. Additionally, banks were
supporting Pfizer by lending the company money. Other reporters reflected the public’s
skepticism toward the acquisition, and reported that the transaction would solve problems
only in the short term. According to the same reporters, the fact that banks were lending
money to Pfizer meant they were financing jobs cutting.

41. 41
Associated Press
The researcher collected and analyzed for relevance 24 articles published between 2009
and 2010. In this case, the media coverage was mostly positive. However, it was
interesting to notice that the majority of positive media coverage came between July and
November 2009 and not in January during the public announcement of the deal. Positive
coverage focused on new vaccines and treatments that Pfizer was buying from Wyeth, a
solidified position as world’s biggest drug maker for Pfizer, increased profits as a result
of cost cutting, and the inclusion of Pfizer’s quotes.
The researcher found five negative articles published in 2009, and two negative
articles published the following year. Negative coverage underlined cost and job cutting,
Pfizer’s profit decline, and many other problems that the acquisition of Wyeth did not
solve, including government lawsuits. It is interesting to note that AP reporters wrote
about jobs cutting as early as the day after the public announcement.
Reuters
The researcher collected and analyzed for relevance 14 articles published between 2009
and 2014. In this instance, the media coverage was balanced in 2009, but steadily
worsened in the following years, with six negative and only one positive news article
between 2009 and 2014. On the one side, positive coverage highlighted that the
acquisition would have helped Pfizer diversify its revenue base with new vaccines and
biologic medicines; the acquisition was also bringing higher profits due to cost cutting;
lastly, Pfizer’s CEO and other top executives were quoted. On the other hand, negative
media coverage underlined shareholders’ dividend and job cuttings, lower stock price,

42. 42
and shareholders’ increased doubts about the strategic alliance. The researcher did not
find any neutral news stories.
The Star-Ledger
According to the Pew Research Center, The Star-Ledger is the largest circulated
newspaper in the U.S. State of New Jersey. The media outlet’s audience was very
important for Pfizer because Wyeth was headquartered in Madison, New Jersey, and the
local population was going to be affected by the acquisition in terms of jobs cutting.
The researcher collected and analyzed for relevance 20 articles published between
2009 and 2014, with the largest media coverage between 2009 and 2010. The majority of
news stories reflected a negative sentiment of the public toward the Pfizer-Wyeth deal,
due to the loss of thousands of jobs in the New Jersey area as a result of the
consolidation.
The Philadelphia Inquirer
Pfizer and Wyeth had a strong presence in Philadelphia at the time of the transaction.
Thus, the Philadelphia media was an important channel to use for all external
communications directed in this region.
According to this capstone paper, six news stories published between 2009 and
2011 show a balance between negative and neutral media coverage. Negative articles
were published when the Pfizer-Wyeth closed in October 2009 and refer to job cuts as a
result of the acquisition. No positive media coverage was found from this media outlet.

43. 43
4.3 Secondary Research: Trade Publications
In addition to targeted media outlets, the researcher scanned media coverage from four
major trade publications because Pfizer had also to convince doctors and scientists that
the acquisition of Wyeth made sense. The medical journals are: FiercePharma, Medical
Marketing and Media, Modern Healthcare, and Pharmaceutical Executive.
After scanning for relevance, 65 articles published in 2009 in the four trade
publications were analyzed for content and sentiment. First, to determine relevance, all
articles had to either mention Pfizer or Pfizer’s acquisition of Wyeth throughout the text.
Second, the same articles were analyzed for sentiment to see how doctors and scientists
reacted to the acquisition and the quality of coverage that influenced them.
The below graph (Figure 4) shows the majority of media coverage in 2009 was
negative (49 percent), followed by neutral (39 percent), and a minor level of positive
coverage (19 percent).
Figure 4
32%
19%
49%
Neutral
Positive
Negative

44. 44
On the one side, the majority of negative articles collected focused on jobs loss as a
consequence of the acquisition. Among the aforementioned medical journals,
FiercePharma is the journal that most covered this specific consequence of the Pfizer-
Wyeth deal. On the other side, it is interesting to note that the majority of positive and
neutral stories published soon after the public announcement did not cover the deal
extensively, but rather focused on other aspects related to Pfizer. Such aspects include a
new Twitter strategy, new Public Policy and Public Relations teams, and new medical
executives on board. Medical Media and Marketing is the trade journal that published the
highest number of positive articles about Pfizer, whereas Modern Healthcare is the trade
publication that less covered the acquisition. Ultimately, Pharmaceutical Executive’s
staff writers reported negative stories about Pfizer and the acquisition of Wyeth during
the two months following the public announcement, and wrote four positive stories
between April and November 2009.
4.4 Stock Performance: Pfizer-Wyeth Deal and Previous M&A Deals
The financial community, which included Pfizer’s shareholders, analysts, and investors,
was a key audience during the Wyeth acquisition. At the time of the acquisition, Pfizer’s
objective was to present the newly combined company as best positioned to deliver
shareholder value. Thus, it was relevant to analyze Pfizer’s stock performance from
January to December 2009, as well as compare it to Pfizer’s stock performance during
previous M&A deals. The goal was to discern shareholders and analysts’ reactions to the
Wyeth acquisition.

45. 45
From the public announcement in January 2009 until March 2009, Pfizer’s stock
performance was on a steep downward trend (Figure 5).
Figure 5
Specifically, Pfizer’s stock price fell from $15.65 per share from the time of the
public announcement to reach its lowest price since 1996 at $11.66 per share after two
months (Figure 6), which equates to over 25 percent decline.
Figure 6

46. 46
On the one side, according to financial reporters, the drop in the stock price was
due to the high costs involved in the acquisition. Specifically, a consortium of banks
provided a total of $22.5 billion in debt to help finance the acquisition; and the Board of
Directors of Pfizer reduced Pfizer’s quarterly dividend per share from $0.32 to $0.16,
which is half of what shareholders were receiving prior to the announcement. On the
other side, according to this research, Pfizer’s stock price was also impacted by negative
media coverage and negative perceptions that investors and analysts had toward Pfizer.
As the year progressed, the stock price recovered slightly. By the end of March
2009, the stock price regained some ground returning to about $14 a share. However,
from mid-March through the end of June 2009, Pfizer’s stock price experienced a fair
amount of volatility due to widespread doubts whether the Wyeth acquisition was
bringing real shareholder value or not.
In July 2009 Wyeth’s shareholders approved the acquisition. Their approval is
reflected on Pfizer’s stock price, which followed an upward trend with a steady growth
month over month until the end of the year, increasing from $14.20 per share to $17.03
per share (Figure 7).

47. 47
Figure 7
Between 2010 and 2014 Pfizer’s stock price (Figure 8) took two evident dips: one
in September 2010 and the other one in June /July 2011. Overall, the stock performance
experienced some degree of volatility, although less accentuated compared to 2009. In
January 2014 Pfizer’s stock price closed at $30.09 per share.
Figure 8

48. 48
In addition, the researcher compared Pfizer’s stock performance during the Wyeth
transaction with Pfizer’s previous M&A deals. If we consider Pfizer’s acquisition of
Warner-Lambert of 2000 (Figure 9), we can see a similar dip soon after the
announcement was made. The stock price quickly reverse its course and was fairly
bullish for the next 3 months. Furthermore, Pfizer’s stock price at the end of June 2000
closed at $48 per share.
Figure 9
Figure 10 and Figure 11 show Pfizer’s stock performance during the takeover
transactions with Pharmacia (2003) and King Pharmaceuticals (2011), respectively. In
2003 Pfizer’s share price experienced extremely high volatility, with two evident dips in
July and October 2002. The stock behavior did not follow the same cycle from the Wyeth
and the Warner-Lambert acquisitions. Yes, there was a dramatic dip in the stock price a
rapid recover. However, the following months did not take on a positive upward trend by
the time of the close in April of 2003. On the other hand, during King Pharmaceuticals’
takeover, Pfizer’s stock performance followed a slow downward trend between October

49. 49
and November 2010, not the usual selloff that has been analyzed thus far. However, the
price then increased from $17.48 per share at the time of the announcement to close at
$19.19 per share when the deal closed which is approximately a 10 percent increase.
Figure 10
Figure 11

50. 50
5
CONCLUSION
M&A activity in the national PLS industry is growing exponentially. On the one side,
there are several business goals and financial advantages behind the reasons why a
company may choose to acquire a rival. On the other side, however, as several
communications and management authors researched over the years, applying the right
communication strategies is an irreplaceable factor to increase the success rate of M&A
deals. Specifically, the theoretical framework of this capstone paper served as necessary
foundation to establish the effectiveness of the strategies Pfizer adopted during the
takeover transaction of Wyeth Pharmaceuticals.
Too often businesses believe that reaching management goals is enough, and
forget about the role played by human psychology in corporate collaborations: all
stakeholders matter, with their emotions and fears, and their goals should be aligned and
actively pursued. Therefore, as communicators, we ought to understand fears and
uncertainty can be eliminated through honest and balanced communication that informs
and educates (Watson, 2011). In addition, by adopting the “Underscore & Explore”
communication strategy (Clampitt et al., 2000), Pfizer’s executives should listen to and
accept key stakeholders’ feedback to recognize potential misunderstandings during future
M&A transactions.
IDIs uncovered that there was some disagreement between Pfizer and Wyeth’s
executives whether all audiences had equal importance or not. Furthermore, Pfizer

51. 51
identified clear goals and strategies for management and shareholders. That is, doing
“everything we can to improve on our revenues and maximize our performance,”
according to former Pfizer’s former CEO Jeff Kindler. Thus, Pfizer’s messages did not
fully address the needs and fears of other key audiences, such as employees, doctors and
scientists, media, and unions. This resulted in increased fears and uncertainty toward the
transaction, which translated into negative media coverage that lasted for years after the
close of the deal, both on mass and trade publications. Furthermore, provided that, to
convey positive sentiment, news articles had to include at least one of Pfizer’s messages,
this capstone paper found that very few articles contained them. Therefore, the majority
of articles contained negative or neutral information, which influenced audiences’
perceptions toward Pfizer accordingly. A logic conclusion is that the pharmaceutical
company did not communicate appropriate messages to the right audiences. As a result,
Wyeth’s employees still feared the loss of their jobs, whereas scientists were preoccupied
because, as part of the corporate collaboration and cost-cutting process, Pfizer had to
divest certain animal health assets and terminate some of its research projects in order to
address anticompetitive concerns from the FTC. Cutting research was one of the short-
term goals Dr. Deming recommended management against already in 1986.
It is also interesting to note that, according to Pfizer, the company did not
encounter any issues with the delivered messages. Thus, although it would not be prudent
to draw any absolute conclusions from the limited group of participants in this research
paper, there was a potential disconnection between Pfizer and its audiences. Positive
news articles from targeted media outlets referred to the clinical value of the Wyeth deal,
underlining vaccines and life-saving therapies, including a cure to Alzheimer disease,

52. 52
Pfizer was acquiring. This suggests Pfizer’s messages could have perhaps been more
effective if they discussed the clinical value in more detail. Furthermore, other news
outlets underlined the clinical value of the Wyeth deal. They included Forbes (Farkas &
van Biesen, 2009), and The Motley Fool (Williams, 2015), for instance. This indicates
that Pfizer may need to reconsider its targeted media outlets for future takeover
transactions.
An evaluation of Pfizer’s financial performance demonstrated media’s role in
influencing analysts and shareholders’ opinions. Specifically, a high volatility in stock
performance was consistent with mostly negative media coverage during the course of
2009. Even when Wyeth’s shareholders approved the deal in July, Pfizer’s stock followed
an erratic upward and downward trend. The stock performance followed an upward trend
only after August 2010, with some minor residual signs of volatility. When comparing
Pfizer’s stock behavior from 2010 to 2014, the researcher found the share price followed
an upward trend. This is not consistent with mass and trade publications coverage, which
maintained almost the same negative sentiment and drastically decreased positive or
neutral sentiment. Therefore, the lack of impact mass and trade media had on stock price
could after 2009 indicate that the media had limited importance as compared to other
information sources. Furthermore, if on the one side the total number of articles about the
Pfizer-Wyeth acquisition diminished after 2009, on the other side negative articles
remained a majority among the total number of articles. This specific aspect, as well as
other aforementioned discrepancies, go beyond the scope of this capstone research and
could be worthy of further investigation in another research paper. In addition, when one
compares Pfizer’s stock behavior during the acquisition of Wyeth with previous M&A

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deals, it is relevant to note that Pfizer’s share price performed better during the takeover
of Warner-Lambert in 2000 for two reasons. First, the initial drop that the acquirer
company’s stock price typically experiences after the public announcement was less steep
and more gradual. Second, from March 2000 until the close of the deal, Pfizer’s share
price followed an upward trend with fair volatility that increased the share price from $30
per share to $48 per share. That constitutes a 14 percent increase compared to only a 2
percent increase in Pfizer’s share price between the announcement and the close of the
Wyeth deal. On the contrary, Pfizer’s stock during the Pharmacia takeover transaction
performed worse than during the Wyeth takeover, with incredibly high volatility and a
share price that decreased between the public announcement and the close of the deal.
Furthermore, Pfizer’s stock price followed an unusual upward trend immediately after the
announcement of the deal. These findings require further investigation and, therefore, go
beyond the scope of this capstone paper.
In 2001 author Jim Collins warned communications professionals about the risks
associated with the Myth of Acquisitions, stating that an organization cannot buy its way
to growth and greatness, and two mediocrities will never make one great company but
rather another mediocrity. This is reflected in a comment from Micheal Obuchowski,
Chief Investment Officer at First Empire Asset Management Inc.: buying Wyeth did not
“make any sense for Pfizer” because “it’s a company in reconstructing acquiring a
company in reconstructing.” Additionally, according to Carol Levenson, analyst with
Gimme Credit LLC in Chicago, Wyeth had also “plenty of lingering legal and patent
expiration problems of its own.” Even former Pfizer’s chairman and chief executive
William C. Steere Jr. told Forbes in 1999 that “Mergers in this industry are made out of

54. 54
weakness. We’re not weak.” During the same interview, he stated that buying size does
not make sense (Woolley, 1999).
Pfizer has changed a lot in more than a decade, and clearly its executives’ views
have changed as well. Today, the pharmaceutical provider finds itself at an important
turning point where it can improve its reputation. Perhaps it could be beneficial if the
company took a step back and focus on six important steps. First, analyze which
messages shaped publics’ positive perceptions toward Pfizer during the Wyeth
transaction. Second, compare shareholders and analysts’ reactions about the Wyeth
transaction with previous M&A deals to find a common denominator. Third, align all
stakeholders’ interests, including scientists, doctors, employees, and unions. Fourth, build
a robust communication strategy for each key stakeholder. Fifth, develop an early
communication process, as well as a strategic post-merger communication plan.
Ultimately, choosing true alliances to develop life-saving medicines rather than focusing
on size and revenues could also change publics’ perceptions not only toward Pfizer, but
also toward the entire pharmaceutical industry.

55. 55
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