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AstraZeneca bid Pfizzles out as deadline passes

By Dan Stanton , 27-May-2014
Last updated on 27-May-2014 at 13:01 GMT

Pfizer has confirmed it has dropped a £69bn ($118bn) bid to buy fellow pharma giant AstraZeneca following yesterday’s acquisition deadline.

Talks of ‘will they, won’t they’ caused ructions across industry boardrooms, R&D and manufacturing sites, as well as within the UK Government over the last few weeks, but speculation as to whether the Anglo-Swedish pharma giant would accept Pfizer’s offer of £55 per share ended yesterday evening.

Pfizer, who will have to wait six months before submitting another bid due to UK takeover rules, said that following the rejection of its proposal it continued to believe the offer had been “compelling and represented full value for AstraZeneca based on the information that was available.”

CEO Ian Read continued: “As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy. We will continue our focus on the execution of our plans, bringing forth new treatments to meet patients’ needs and remaining responsible stewards of our shareholders’ capital.”

In a statement, AstraZeneca’s Chairman Leif Johansson said: “We note Pfizer's confirmation that it no longer intends to make an offer for AstraZeneca. We welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company.”

However, Mark Schoenebaum - an analyst from the ISI Group - told in-Pharmatechnologist.com he thought there is a 50/50 chance that the merger will still happen, though such an announcement will not come for up to ten months.

The ongoing pursuit by Pfizer led to questions being asked as to what cuts to R&D, manufacturing and jobs might occur if the two firms combined.

Though Pfizer pledged in front of the UK parliament’s Innovation and Skills Committee earlier this month that it would retain 20% of its global R&D workforce in the UK as well as a “substantial” level of manufacturing, there was some scepticism partly due to Pfizer’s previous M&A track record.

The UK’s Leader of the Opposition, Ed Milliband, wrote to Prime Minister David Cameron earlier this month accusing him of “cheerleading for this deal” and citing “concerns about Pfizer’s wider track record regarding the impact on research of previous takeovers.”

After the Pfizer-Wyeth mega-merger in 2009, a number of UK R&D sites were shuttered including the Sandwich, Kent facility where erectile dysfunction drug Viagra was discovered. The firm has also been selling and closing manufacturing sites in order to reduce over-capacity and its global network which swelled to 78 sites following the takeover .

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