This case is about MERGERS & ACQUISITIONS
PUBLICATION DATE: November 03, 2004
General Electric’s Acquisition of Amersham PLCÂ Case Solution
In September 2003, Jeffrey Immelt, CEO of General Electric, must evaluate a final proposal for GE to get Amersham plc, the leading producer of contrast agents used in medical diagnostics. The case allows the valuation of Amersham based on peer businesses, comparable transactions, and recent trading history.
On close examination, the business’s IP position is poorer than it appears, given recent patents filed by competitors. The economical impact of these IP challenges may be tested in the instance Visipaque, of the firm’s top product, for which the case gives cash flows. Discounted cash flow analysis shows great susceptibility to the remaining years of effective patent life. A key lesson underscores the significance of due-diligence research on a business’s IP standing.
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