Fresenius A.G.: Globalization

Strategy and Entrepreneurship, Strategy and Entrepreneurship

1999

On 4 February, 1996, Germany Based Fresenius surprised its competitors and the financial markets with the announcement that it had agreed with WR Grace of the US to merge the two companies’ dialysis treatment, products, and technology businesses to form Fresenius Medical Care (FMC). The merger had many dramatic ingredients. There was an element of reaching for the stars: the merger with WR Grace’ NMC unit more than doubled Fresenius’ group sales and nearly quadrupled employee numbers. When Fresenius’ creative equity and bank financed cash offer won out over the pure cash deal proposed by the worlds largest dialysis equipment supplier, Baxter International, David’s slingshot beat Goliath’s club. Perhaps most intriguing of all, however, the merger of Fresenius, concentrated in products, and NMC, concentrated in treatment, signalled a major shake-up in renal care: competition in dialysis treatment, like competition in dialysis products a few years before, was going global. Although the NMC deal did represent a giant step forward in Fresenius’ global ambitions, the move was built on solid financial, strategic, and managerial bases. As a contemporary comment in the Financial Times, put it, “Fresenius was no tyro”. A series of international acquisitions, strong organic growth, and a powerful strategic agenda had already made the company a darling of the stock markets, the the second-best performer in the FAZ index of 100 German Companies for 1995, after SAP. News reports on growth, on shareholder value, and on management, could not get enough of Frsenius. In a series of businesses which until the early 1990s had been highly fragmented with numerous local players, Fresenius had initiated and driven globalization.

CS-99-013

ERC Advanced Grant

No