VNU and IMS scrap $7bn merger plans
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VNU has scrapped its $7bn takeover of IMS Health in the face of overwhelming shareholder opposition.
The deal – had it gone through – would have led to the merger of the world's first and third largest research organisations.
The failed merger has claimed the scalp of Rob van den Bergh, chairman and CEO of VNU, which owns research agencies ACNielsen and Nielsen Media Research.
Van den Bergh today resigned his position at the Dutch business information giant, but said he would continue working for the company until a successor is found.
In an internal memo shown to Research, he said: “This certainly is a very difficult decision for me, but with insufficient shareholder support for the IMS Health transaction, I believe it is the appropriate decision.”
The two companies first announced plans to merge in July, hoping to generate $150m in additional revenues by 2008 through tie-ups between their respective retail sales, media and pharmaceutical tracking operations. Cost savings were projected at $100m within the first three years.
However rebel shareholders, led by Knight Vinke Asset Management, went public with their concerns that the deal was over-priced and risky, while questioning VNU's ability to extract meaningful synergies from the merged businesses.
The agreement with IMS was called off when nearly 50% of VNU's shareholder base warned they would not support the transaction “under any circumstances”.
In his note to employees, Van den Bergh said he was “disappointed with this outcome”. “I believe that the merger would have enhanced VNU's many strengths and increased shareholder value.”
He went on to say in an official statement that: “Dave Carlucci [IMS chief executive] and I are committed to having our two companies work together cooperatively to develop the many joint revenue initiatives that came out of our integration planning process.”
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