Pfizer wants mega AstraZeneca merger
AFP Tuesday, April 29, 2014, 12:03 am TWN
LONDON--U.S. drugs giant Pfizer wants to form a blockbuster merger with British rival AstraZeneca after confirming on Monday that an informal approach worth almost US$100 billion had been rejected.
Pfizer chairman and chief executive Ian Read said a tie-up between two of the world's biggest pharmaceutical groups would "help to fight some of the world's most feared diseases, such as cancer," as well as benefiting shareholders of both companies.
AstraZeneca had yet to respond to Pfizer's statement, which comes as the global pharmaceutical sector is undergoing a huge shake-up to battle against patents expiring on key brands and deep cuts to government healthcare spending worldwide.
AstraZeneca's share prices surged 15 percent in response to Monday's statement and at the start of trading in London, bringing its market value to slightly above January's informal offer price of US$99 billion.
In a statement issued to the London Stock Exchange on Monday, Pfizer said "it previously submitted a preliminary, non-binding indication of interest to the board of directors of AstraZeneca in January 2014 regarding a possible merger transaction."
It added: "After limited high-level discussions, AstraZeneca declined to pursue negotiations." Pfizer however stressed "its continuing interest in a possible merger transaction."
Pfizer said it had informally offered 46.61 pounds (US$78.4, 56.59 euros) per AstraZeneca share on Jan. 5, which valued the target company at 58.8 billion pounds (US$99 billion).
The U.S. company added that it had contacted AstraZeneca on Saturday "seeking to renew discussions in order to develop a proposal that could be recommended by both companies to their shareholders."
Pfizer said it was "considering its options" after AstraZeneca once more refused to take up the interest.
Read on Monday said "patients all over the globe would benefit" from a merger, "in the form of potential new therapies that help to fight some of the world's most feared diseases, such as cancer."
He added in the statement: "The combination of Pfizer and AstraZeneca could further enhance the ability to create value for shareholders of both companies."
Speaking last Thursday, AstraZenenca chief executive Pascal Soriot said the company was on the look out for deals.
His comments came after drugmakers Novartis and GlaxoSmithKline last week unveiled multi-billion-dollar deals also involving U.S. group Eli Lilly.
The string of takeovers and ventures by the three giant healthcare groups will see Novartis sharpen its focus on the high-grossing cancer sector, GSK boost its share in vaccines and Eli Lilly strengthen its animal health unit.
AstraZeneca is itself looking to push ahead with new treatments for cancer, respiratory disease and diabetes after announcing a plunge in profits for the first quarter, hit by generic competition following the loss of exclusivity for some of its key drugs.
In a bid to turn around the firm's fortunes, AstraZeneca is also shedding around 5,000 jobs under a three-year cost-cutting program due to end in 2016.
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