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What is the price of integrity?


Scientific research suggests that whilst deception, deceit and untruths (i.e. generally bad behaviour) damage a relationship, it is possible to rebuild trust, but not integrity.


Behavioural issues (past and present) are one of the main reasons as to why commercial deals can’t be agreed in the first place or why they fall apart further down the line.


Over the last week, Vectura – a company that manufactures and supplies inhaled medicines and devices to blue chip companies, treating respiratory illnesses such as asthma, has been the subject of three take-over bids.


Philip Morris, the international tobacco giant made its first bid last week. This was swiftly followed by a bid from Carlyle, a US private equity company, an organisation described as being ‘better positioned’. Phillip Morris has now increased its offer to buy the respiratory drug maker to more than £1bn. The Marlboro cigarette maker has also publicly ‘suggested’ that it may stop selling cigarettes (in favour of heated tobacco) in the UK within the next 10 years.


For Vectura, the conflict dilemma is whether the potential short term financial gain of a higher valuation outweighs the possible negative impact and reputational damage by association with the tobacco giant.


If the Phillip Morris takeover goes through, Vectura stakeholders may face some difficult choices ahead between great products and unpalatable relationships. Maybe some form of carefully targeted PR now from the stakeholders could at least insulate them from the initial stain of negative publicity and buy themselves some thinking time.


It will be very interesting to see what happens going forwards - the reputations and relationships that flourish and those that don’t over the course of the next ten years - by which time Philip Morris may or may not still be in the UK cigarette market.


Sam Macbeth, 9th August 2021

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