The U.S. drugmaker Pfizer seeks to acquire the British AstraZeneca for an amount greater than 100 billion dollars, creating a new giant in the global pharmaceutical market. Pfizer Inc. confirmed that they approached, initially in January, the AstraZeneca with a merger proposal and that there was a second approach in April 26 in order to begin discussions on a takeover. AstraZeneca’s shares soared 15% at the start of today’s trading session. If realized, the acquisition will be one of the biggest deals ever made in the pharmaceutical industry. The new approach by Pfizer came amid a wave of mergers and acquisitions in the sector.
In an announcement to the London Stock Market, Pfizer said that AstraZeneca had refused debates in both cases and that the U.S. group is now considering his options. The original proposal by Pfizer, which became the Board of AstraZeneca on January 5, included a combination of cash and shares and assessed the value of the shares of the British company to 46.61 pounds (76.62$), a surcharge on about 30% at the time. The U.S. company said it is now considering the possibility of a transaction in which the shareholders of AstraZeneca would still have a significant increase in the value of their shares. The share price of British group closed on Friday at 40.80 pounds, the stock value stood at 51.5 billion pounds (86.6 billion dollars). Since Pfizer will likely need to offer higher price premium this time, the final value of the Agreement may be significantly more than 100 billion dollars.
An AstraZeneca spokesman said that the company does not have to immediately make any comment on the announcement of Pfizer, adding that they will consider their reaction. The acquisition of the British company would give Pfizer a series of promising, though still risky, experimental cancer drugs known as immunotherapies that enhance the human immune system to treat tumors, while it can also be a significant cost savings. The acquisition of a foreign company has on another rationale for Pfizer, as it has accumulated tens of billions of dollars in foreign subsidiaries, which would be taxed at high rates, if repatriated to the USA.
The American group has a long tradition of large acquisitions, most recently with the purchase of Wyeth in 2009. Transaction would be complementary for both innovative drugs unit of Pfizer and for established products, which include older drugs and off patent drugs.
By Nicole P.