Arab Today, arab today drug giants pfizer astrazeneca in 100bn merger tussle
Last Updated : GMT 14:35:50
Arab Today, arab today
Arab Today, arab today

Drug giants Pfizer, AstraZeneca in $100bn merger tussle

Arab Today, arab today

Arab Today, arab today Drug giants Pfizer, AstraZeneca in $100bn merger tussle

London - AFP

US drugs titan Pfizer is pursuing plans for a blockbuster merger with British rival AstraZeneca to fuel cancer treatments despite having a $100-billion bid rejected, the firms revealed on Monday. Pfizer chairman and chief executive Ian Read said that a tie-up between two of the world's biggest pharmaceutical groups would "help to fight some of the world's most feared diseases, such as cancer". It would benefit also the shareholders of both companies, he claimed in a Pfizer statement. AstraZeneca hit back, arguing that the informal offer made by Pfizer in January "very significantly" undervalues the company. Outlining its defence in a statement, it added that its "board remains confident in the ongoing execution of AstraZeneca's strategy as an independent company and that its successful delivery will create significant value for shareholders". Analysts said Pfizer was unlikely to walk away at this point and the bid was set to turn hostile. AstraZeneca's share price surged by 17 percent in response to Monday's developments, bringing the company's market value to slightly above January's informal offer price equivalent to about 72 billion euros. Monday's developments come as the global pharmaceutical sector is undergoing a huge shake-up to face the challenges of expiring patents for key brands and deep cuts to government healthcare spending worldwide. On a broader front, big companies are showing renewed interest in takeover opportunities amid a new-found appetite for risk, driven by strong cash positions, and cheap money since the financial crisis Reports of a potential tie-up between the two drugs groups had first emerged one week ago. In a statement issued to the London Stock Exchange, Pfizer said "it previously submitted a preliminary, non-binding indication of interest to the board of directors of AstraZeneca in January 2014 regarding a possible merger transaction". Pfizer also stressed "its continuing interest in a possible merger transaction"after again contacting AstraZeneca on Saturday "seeking to renew discussions". - Pfizer to turn 'hostile' - Joshua Raymond, chief market strategist at City Index trading group, said Pfizer's statement indicated that the company was no longer interested in a friendly merger deal. "Make no mistake, the confirmation today of Pfizer’s interest is a declaration of its intention to now pursue a hostile merger. "With AstraZeneca rebuking their attempts to negotiate, Pfizer has tried to create a buzz within AstraZeneca's leading shareholders to get them to force the issue with the current board. "The board of AstraZeneca remains under pressure after falling sales and a failure to gain momentum for ... turnaround plans," Raymond said in a note to clients. Pfizer said it had informally offered £46.61 ($78.4, 56.59 euros) per AstraZeneca share on January 5 in a cash and stocks offer, which valued the target company at £58.8 billion ($99 billion). Read said on Monday that "patients all over the globe would benefit" from a merger, "in the form of potential new therapies". He added: "The combination of Pfizer and AstraZeneca could further enhance the ability to create value for shareholders of both companies." - Rush of tie-ups - Speaking last Thursday, AstraZenenca chief executive Pascal Soriot said his company was on the look out for deals. Soriot, who also said that large acquisitions can be "very disruptive", spoke following publication of AstraZeneca's latest earnings update and after drugmakers Novartis and GlaxoSmithKline unveiled multi-billion-dollar deals also involving US group Eli Lilly. The string of deals by the three giant healthcare groups will see Novartis sharpen its focus on the high-grossing cancer sector, GSK boost its share in vaccines and Eli Lilly strengthen its animal health unit. Also last week, Valeant Pharmaceuticals offered to acquire Botox-maker Allergan for more than $45 billion. Raymond said that a merger would produce also a massive tax benefit for Pfizer. AstraZeneca is looking to push ahead with new treatments for cancer, respiratory disease and diabetes after announcing a plunge in profits for the first quarter, hit by generic competition following the loss of exclusivity for some of its key drugs. AstraZeneca is shedding also around 5,000 jobs under a three-year cost-cutting programme due to end in 2016.

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Arab Today, arab today drug giants pfizer astrazeneca in 100bn merger tussle Arab Today, arab today drug giants pfizer astrazeneca in 100bn merger tussle

 



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