Providing her a helpful example will be the pharmaceutical industry's consolidation, plowing ahead in full force. Significant
M&A activity in the past year includes MNCs like Amgen, Pfizer, and Sanofi, as well as domestic firms like Hypermarcas, which
made 10 acquisitions in 2010, and acquired Mantecorp (a top 5 domestic player) for US$1.5 billion. Perhaps no one else is
better qualified to speak on Brazilian consolidation than Claudio Bergamo, CEO of Hypermarcas, Brazil's largest consumer goods
company, which with an annual turnover of over R$5 billion (US$2.86 billion), more than any of its national or international
competitors in the country. Speaking about the pharma sector, Bergamo says, "Historically, the market was very fragmented,
with more than 50% of total market in the hands of Brazilian companies. Hypermarcas saw the opportunity to consolidate many
successful family owned companies that were going through succession issues. Previously, these companies competed against
each other, not taking advantage of the synergies that would have existed if they were grouped under the same platform."
Top 25 Breakdown: More than meets the IMS Data
Bergamo has fostered this platform in Hypermarcas' rapid ascent, which has seen close to 25 acquisitions since April 2008,
when it became public. He has continued to further develop many of these companies—and together they have the country's largest
number of product launches, supported by "heavy investments on field sales forces, efficient operations, strong distribution,
and demand generation," Bergamo says. Now, however, with an average industry EBITDA hovering at 20, he is easing up on the
buying spree. "There are still some opportunities remaining for further consolidation, but we do believe we have acquired
the best assets available in the last years.
Hypermarcas M&A strategy was to acquire the best companies, which could be further developed—and not 'bargain' situations.
Nowadays, if you go into a drug store, there is not a single section where Hypermarcas doesn't have a product—diapers, cosmetics,
men's and women's care etc—extending through OTC and generics. And, in many of these markets, we have relevant market shares
and leadership positions," Bergamo notes, and highlights the company's dominance: the best portfolio of businesses and brands
in all major relevant markets, being the No. 1 in OTCs, No. 1 in branded generics, No. 2 in Rx, No. 2 in dermo-cosmetics,
No. 1 in condoms, and No. 1 in sweeteners, among others.
Alexander Triebnigg, president, Novartis
Eyeing the Top 25 players in Brazil (refer to chart on page S12. This retail data; granular hospital records are not kept),
one sees familiar faces: Sanofi, Novartis, GSK, Pfizer—although none of these is ranked at or above its global position. But
the real story is the rapid advancement of local players like Neo Quimica (No. 7), Teuto (No. 13), Germed (No. 24), and LeGrand
(No. 21); the continued independence, despite acquisition attempts, of some of its marketshare leaders such as Cristalia and
Mauricio Billi's Europharma; and the surprising dominance of domestic firms, as well as the fact that few remain independent.
EMS's lead is even more dominant than a No. 1 position for the last five years suggest; Germed and LeGrand are both brands
of EMS. Hypermarcas acquired Neo Química in 2009, and owns Mantecorp (No. 20), while Sanofi now owns Medley (No. 2), and Sandoz
(No. 16) is, of course, under Novartis. With further "pharmarriages" likely in the works, this list will become even smaller—and
even more inbred.