A board's duty to maximize shareholder value is an expected value calculation. A $100B offer with a 75% chance of closing is valued at $75B, making an $80B offer with 100% certainty more attractive. Boards weigh financing and regulatory risks heavily against the headline price.

Despite its first-mover advantage, Novo Nordisk lost its lead in the weight-loss drug market by failing to recognize its consumer-driven nature. While it planned a traditional pharma launch, competitor Eli Lilly adopted a direct-to-consumer model, treating the drug like an e-commerce product and capturing the market.

In a competitive M&A process where the target is reluctant, a marginal price increase may not work. A winning strategy can be to 'overpay' significantly. This makes the offer financially indefensible for the board to reject and immediately ends the bidding process, guaranteeing the acquisition.

Despite being a 33-year veteran and 12-year executive, Novo Nordisk's new CEO attended the JP Morgan conference for the first time. He brought his entire executive team to combat the company's historical insularity and increase external partnerships.

Pfizer's licensing deal with Yao Pharma for a Phase 1 oral GLP-1 agonist underscores the immense value placed on convenient obesity treatments. The potential $1.935 billion in milestones for such an early-stage asset highlights big pharma's strategy to pay a premium to enter the next wave of weight-management therapies beyond injectables.

The US Federal Trade Commission actively discouraged Metsera from accepting a bid from Danish company Novo Nordisk, citing antitrust concerns. This intervention, viewed as an "America First" move, was a decisive factor that allowed the US-based Pfizer to ultimately win the acquisition, signaling geopolitical influence in biopharma M&A.

To maintain pricing discipline, Fairfax has a strict M&A rule: it never participates in auctions or bidding wars. Once an offer is made, it's final. This strategy prevents them from overpaying and ensures they only acquire companies at prices that offer attractive future returns.

Recent acquisitions, like the bids for Avidel and Cedara, have involved rare, publicly competitive bidding wars. This shift indicates a more heated and aggressive M&A environment where acquirers are willing to fight openly for strategic assets, a departure from typical private negotiations.

The FTC's concern over Novo's bid for Metsera was based on its dominant 48% share of the narrow GLP-1 market, not the broader obesity therapeutic area. This signals that regulators will scrutinize M&A deals based on mechanism-specific market definitions, creating hurdles for established players seeking to acquire assets in their core classes.