Pfizer ends pursuit of AstraZeneca
20 May 2014
US Pharmaceuticals firm Pfizer has had its final proposal to acquire AstraZeneca rejected by the company’s board.
The final attempt to merge US pharmaceuticals firm Pfizer with UK-based AstraZeneca has “fallen short” of expectations as AstraZeneca’s board reject a third bid worth £69 billion.
The deal, which has sparked considerable debate between the two companies, was scrutinised by a House of Commons science and technology committee hearing last week after concerns were raised over the future of the UK’s research and development (R&D) capabilities if a deal were struck.
We have rejected Pfizer’s final proposal because it is inadequate
AstraZeneca chairman Leif Johansson
Prior to the hearing, Pfizer’s chief executive Ian Read had stated that at least 20% of the company’s R&D headcount would remain in the UK for at least five years.
However, AstraZeneca’s chief executive Pascal Soirot repeatedly raised concerns regarding Pfizer’s takeover strategy, suggesting a merger would create both “disruption” and “distraction” to AstraZeneca staff and its drug-discovery potential.
AstraZeneca bosses remained defiant that a merger would not be in the interest of its staff, shareholders or its long-term potential, and yesterday’s announcement to reject Pfizer’s final proposal clarified this.
“We have rejected Pfizer’s final proposal because it is inadequate and would present significant risks for shareholders, while also having serious consequences for the company, our employees and the life-sciences sector in the UK, Sweden and the US,” said AstraZeneca chairman Leif Johansson.
“The final proposal is a minor improvement which continues to fall short of the board’s view of value and has been rejected,” he added.
Pfizer’s second bid, which was rejected earlier this month, was valued at around £63bn.
“Pfizer’s approach throughout its pursuit of AstraZeneca appears to have been fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimisation,” Johansson said.
Though analysts suggested a deal “may still be possible”, statements made by AstraZeneca suggested otherwise.
“Pfizer stated that its Friday proposal was final and would not be amended. As a consequence the discussion ended,” a statement on the firm’s website says.
AstraZeneca’s board then met after its discussions with Pfizer and reconfirmed its rejection of Pfizer’s final proposal.
