Drugs mergers promise work

Identity groups could be in for a bonanza from drugs company mergers as the UK’s third biggest pharmaceuticals business Zeneca announced its proposed 40bn-plus merger with Swedish rival Astra.

The planned deal follows the news of Aventis earlier this month, a proposed merger between life sciences divisions of Hoechst and Rhône-Poulenc. City analysts predict more activity in mergers between drugs groups as competition intensifies between European companies and their bigger US rivals.

An identity group is expected to be appointed next year as a result of the Astra/Zeneca deal, but a Zeneca spokeswoman declines to comment on the selection process. “We will look to appoint someone but it’s early days and we’ve got to go through all the regulatory bodies,” she adds. Both AstraZeneca and Aventis are using interim identities. Connecticut group Corporate Branding is designing the Aventis identity, which will be out early next year, says a spokeswoman for Aventis.

According to Gary Dugan, European equity strategist at investment bank JP Morgan, there will be continued activity in pharmaceuticals mergers: “The burden of research and development which pharmaceuticals companies have to carry out is so large that the only way to compete is to have greater sales. We think there will be more mergers to come.”

Landor Associates executive director Adrian Day expects branding and naming in this sector to become more important as the cross-over between prescription and over-the-counter drugs increases. A more informed general public could lead to such corporations becoming household names, he adds. Landor designed the SmithklineBeecham identity.