Publications
Publications
- October 1996 (Revised December 1997)
- HBS Case Collection
American Cyanamid (A): Boardroom Response to a Hostile Takeover Offer
Abstract
American Home Products' (AHP) $9 billion hostile takeover of American Cyanamid (Cyanamid) was the largest mergers and-acquistions transaction in 1994, and made AHP the fourth largest pharmaceutical firm in the United States. At the time of AHP's offer, Cyanamid had already begun to restructure by selling its consumer products businesses, spinning off its chemicals division, and entering into asset swap negotiations with SmithKline Beecham. AHP entered the fray, at least in part, to block the asset swap deal. The case takes students inside the board room and describes the tension generated by the fact that Cyanamid's management and its outside directors had different views on the desirability of the takeover. At issue is whether Cyanamid's board will endorse AHP's hostile offer in spite of the fact that management does not support the offer, and instead supports a lower-valued friendly asset swap with SmithKline Beecham. After a tense and painful board meeting that lasted several days, the board voted unanimously to support the offer.
Keywords
Governing and Advisory Boards; Mergers and Acquisitions; Corporate Governance; Pharmaceutical Industry; United States
Citation
Wruck, Karen, and Sherry P. Roper. "American Cyanamid (A): Boardroom Response to a Hostile Takeover Offer." Harvard Business School Case 897-048, October 1996. (Revised December 1997.)