Pfizer Seeks Takeover Of AstraZeneca

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American Pharmacutical giant, Pfizer, tells The City, it is profoundly interesting in seeking the  biggest ever foreign takeover of a UK company and AstraZeneca shuns them a second time. 

It would be one of the biggest pharmaceutical deals ever and doing so would create a new incorporated holding company. It would also be one of the most expensive foreign takeovers of a UK company.

The battle has begun with Pfizer releasing a statement this morning saying it was interested in buying the UK’s AstraZeneca. The American pharmaceutical giant said it was willing to pay almost $60bn to secure biggest foreign takeover of a UK company. The takeover is said to be in the region of $60-$100 billion.

That led to AstraZeneca shares soaring today morning by 15%, to £46.91 adding almost $80bn to the company’s market value.

Previously Pfizer and AstraZeneca held merger talks earlier this year in January. This deal included a combination of cash and shares in the combined business, which represented an indicative value of $76.62 AstraZeneca stopped talks on the 14th January saying Pfizer “very significantly undervalued AstraZeneca and its prospects.”

Pfizer said early of the deal “We have great respect for AstraZeneca and its proud heritage as an innovation-driven biopharmaceutical business with a rich science-based foundation in both the United Kingdom and Sweden. In addition, the United Kingdom has created attractive incentives for companies to manufacture products and maintain and protect intellectual property, and we have seen that capital and jobs have followed these types of incentives.
“We believe patients all over the globe would benefit from our shared commitment to R&D, which is critical to the future success of the pharmaceutical industry, in the form of potential new therapies that help to fight some of the world’s most feared diseases, such as cancer.

“The combination of Pfizer and AstraZeneca could further enhance the ability to create value for shareholders of both companies and bring an expanded portfolio of important treatments to patients. A potential combination with AstraZeneca aligns with Pfizer’s current structure and fully supports its existing strategy to build world-class businesses. The combination would complement our two innovative businesses and our Global Established Pharmaceutical business, allowing us to maintain the flexibility for the potential future separation of our businesses whilst at the same time broadening our pipeline breadth and potential new product launches over coming years. We believe that a transaction would further strengthen our ability to generate strong and consistent cash flow, targeted for both investment in our business and return to shareholders, while at the same time offering an efficient operating structure and the anticipated realization of attractive synergies”

Pfizer, best known for producing Viagra (generic Nizagara), said it was considering its options and if the deal went ahead one of the possible transactions would be that AstraZeneca shareholders would receive a significant premium for AstraZeneca shares, which would be paid in cash and shares in the newly formed entity. AstraZeneca shareholders would also become significant shareholders if they deal went ahead.

If the takeover goes ahead would be dwarf Kraft's £12bn takeover of Cadbury in 2010 and Telefonica of Spain's £17bn takeover of O2 in 2005.