Pfizer courts AstraZeneca megamerger


US-based pharma behemoth Pfizer has publically announced its intention to make a merger offer to the UK’s AstraZeneca (AZ), in a deal valued at around $100 billion (£60 billion). AZ has rejected Pfizer’s advances, saying that without a ‘specific and attractive proposal, it was not appropriate to engage in discussions with Pfizer’.

Pfizer’s public offer follows a more secretive approach earlier in the year, which AZ’s board was equally disdainful of, saying that the offer significantly undervalued the company. This view takes account of AZ’s recent efforts to rebuild its drug pipeline and turn around its declining performance after losing patent protection for several top-selling drugs.

Any deal that does go ahead will be complex. Pfizer is proposing to shift its tax domicile to the UK to take advantage of lower corporation tax rates and tax breaks on UK-based discoveries through the government’s ‘patent box’ scheme. It would also need to account for the fact that AZ is in the middle of a huge restructuring process, including moving its main R&D operations from Alderley Park in Cheshire to Cambridge. However, this game is not new to Pfizer, having completed similarly large deals in the past when it took over Wyeth for $68 billion in 2009, and Warner-Lambert for $112 billion in 1999. Pfizer’s chief executive, Ian Read, pointed to this ‘proven track record of acquisitions’, saying that the company’s ‘extensive integration experience’ would help make the deal successful.

Further analysis of this and other deals can be found on the Chemistry World blog


Related Content

Time called on Pfizer–AstraZeneca deal

28 May 2014 Business

news image

Pfizer could make a fresh approach after six months under City takeover rules

AstraZeneca claims quashed in heartburn drug patent case

23 December 2013 Business

news image

Nexium rival does not infringe on patent, court rules

Most Read

Cannabis chemists look for professional recognition

16 October 2014 News and Analysis

news image

The American Chemical Society is being petitioned to form a division to help develop standards in the field

Not all science is created equal

16 October 2014 Comments

news image

John Ioannidis explains why researchers should be curious about the differences between disciplines

Most Commented

Helium happily shares electrons to create dianions

16 October 2014 Research

news image

Fullerene dianions created in nanodroplets of helium opening up new ways of creating exotic molecular species

Not all science is created equal

16 October 2014 Comments

news image

John Ioannidis explains why researchers should be curious about the differences between disciplines