Pfizer Chasing AstraZeneca
$100 billion seems pretty good to me, but apparently not to AstraZeneca. who has rejected two bids already from Pfizer. On April 26th Pfizer once again contact their British rival AstraZenca seeking to further discuss the deal and put it into motion.
Part of the push and urgency in this deal is the recently high amount of mergers and acquisitions in the healthcare industry. The industry has been making a considerable push to restructure due to two major factors, the first being healthcare spending cuts and the second the large amount of cheap generics flooding the market. The deal would be one of the largest pharmaceutical deals to ever take place and it would also be the largest foreign takeover that has occurred of a British company. It will also be Pfizer’s first major acquisition since the company’s 2009 takeover of Wyeth for 68 billion.
AstraZeneca has declined to talk with Pfizer on both offers, despite the fact that Pfizer offered a 30% premium on current share value. However, Pfizer’s offer was a combination of both cash and stock shares. As a result AstraZeneca stock has hit an all-time high of 47.14 pounds. Estimates on the stock analyst market say that Pfizer will most likely acquire the company at 49 pounds per share or more.
One of the main lures of AstraZeneca is a large number of attractive cancer drugs that are still in clinical trials. The drugs are all promising, but all still have plenty of risk. These drugs are known as immunotherapies as they boost the body’s immune system to help the body fight cancer tumors better.
Pfizer besides acquiring some great potential drugs would realize a number of other benefits. The first is the large amount of reserves and profits and reserves that Pfizer hold offshore would not need to be repatriated and taxed in the US. This would also bolster Pfizer’s cash and active drugs on the market.
Britain’s prime minister has agreed that he will not get involved in the deal. However, the deal is of concern to Britain as the pharmaceutical industry is one of Britain’s major job sectors and AstraZeneca has already laid off thousands of staff. Pfizer has indicated that the combined company will be reformed under a UK incorporated holding company, but the head office would remain in New York.
