The merger of Sandoz and Ciba-Geigy is different from others in the
pharmaceutical sector in that they have chosen a completely new identity
and put a PR firm in charge of launching it
The merger of Swiss pharmaceutical companies Sandoz and Ciba-Geigy,
which subject to regulatory approval will take place this autumn, will
create the second largest drugs company in the world. It is the latest
in a string of mergers within the sector.
The consolidation has been driven by the benefits to be had from lower
overheads and shared research, sales and marketing costs. There is also
the opportunity to greatly reduce the corporate wage bill by phasing out
overlapping roles - in the case of the Sandoz and Ciba merger 13,000
people, or about ten per cent of the staff are expected to lose their
With the exception of the sheer size of the combined entity, all this is
pretty much run-of-the-mill for pharmaceutical mergers. But what sets
the merger of Sandoz and Ciba apart from the others is the decision not
to combine the corporate names in the manner of Glaxo Wellcome or indeed
Ciba-Geigy, itself the product of a merger 20-odd years ago.
The newly merged company will bear the name Novartis, derived from the
Latin for new skills. The thinking here is that a fresh name will help
employees set aside their old affiliations and embrace the values of the
‘What is an important point to consider is that the new company is
unique,’ says Ciba head of corporate identity communications Henner
Lappe. ‘The result of the merger is not just Sandoz and Ciba coming
together but a new company. We’ll be demonstrating the strength of the
new entity as opposed to building on old blocks.’
Such a fundamental change - together with the restructuring ahead -
needs to be carefully communicated both internally and externally. That
is why Novartis has hired Ruder Finn (PR Week, 12 July) to co-ordinate a
year-long pounds 29 million integrated global communications and
Ruder Finn picked up the contract after a two month pitching process
involving 12 PR and advertising agencies. It beat competition from
advertising agencies with more clout by assembling a team that included
other external consultants: London-based media buyer CIA and New York
technology group Tumble Interactive.
‘We wanted to guarantee that they had the best combination of resources
in the world,’ says Ruder Finn president Kathy Bloomgarden. ‘I’ve worked
with many, many companies but I’ve rarely seen one as global as this.’
The work, to be co-ordinated out of Ruder Finn’s New York office will
comprise media relations, event management, direct marketing, internal
communications, Internet promotions and advertising.
Using the Intranet to inform employees of changes will also be an
important element in the communications programme.
The sheer scale of the task explains why Novartis chose to bring in an
outside firm to co-ordinate communications. But why did it choose a PR
firm rather than an advertising agency?
Ironically part of the answer is that the Ruder Finn beat the
advertising boys at their own game. The agency’s own in-house design and
creative group is handling the creative work for both the Internet
promotions and more traditional advertising.
But more than that it demonstrated a belief in an integrated approach to
communications. ‘It turned out that Ruder Finn could come up with a good
creative solution for our needs, and it means we can combine the
strength of an advertising and PR campaign,’ says Lappe.
‘We have always used an open and integrated approach to communications,
we always felt it was more than printed ads and TV,’ adds Walter von
Wartburg, Novartis’ designated head of communications in Basle. Whatever
the reasons, Novartis’ decision to hand the communications reins to
Ruder Finn is good news for PR firms. ‘It’s good for PR because if the
Ruder Finn example is followed by others then the precedent will be set
for PR driving the communications for mergers,’ says a pharmaceutical
industry PR man.
One senior in-house communicator at a large pharmaceutical company has
doubts about the wisdom of outsourcing such a major project wholesale.
‘The danger in hiring one outfit to oversee the communications is that
you need to manage your consultants. It’s not the way that we go about
However, von Wartburg does not think this will be a problem. ‘We will
exercise strategic control,’ he says.
Post merger, Novartis will have to commit itself to building a new
corporate image. It wants to establish itself as a leading life sciences
company - a corporation whose interests span healthcare, agri-business
‘We want the important people to associate the name Novartis with a
large innovation-based worldwide life sciences company,’ says von
Wartburg. ‘We won’t go into detail during the launch stage. You can’t
have detail without people first being clear about the name.’
Glaxo Wellcome also felt the need to pay attention to its corporate
brand following its merger. For the first time it is running a corporate
TV advertising campaign. Its purpose - apart from reinforcing the
corporate name to investors, consumers and health professionals - is ‘to
explain the role of the pharmaceutical industry,’ says Glaxo Wellcome
corporate communications manager Martin Sutton.
This championing of the industry as a whole is a by-product of Glaxo
Wellcome’s status - in other words, what’s good for the pharmaceutical
sector as a whole must also be good for a player as large as Glaxo
Wellcome. Another change linked to its inflated size is a subtle shift
from straight product marketing to a broader promotion of the disease
areas in which it is involved.
In those areas where the company has a strong product portfolio it makes
sense to promote corporate expertise in the area rather than just
individual brands. With its own enlarged product portfolios and the
prospect of economies of scale in campaigns covering a number of brands,
it seems inevitable that Novartis will follow a similar route.