Pfizer abandons £70bn pursuit of AstraZeneca

Pfizer has said it has given up on trying to acquire British drugs firm AstraZeneca – for now, at least.

Pfizer had increased its initial £58.8bn bid on 18 May to almost £70bn in its attempt to snare AstraZeneca, but has been forced to walk away after it failed to reach agreement with the firm before a 5pm deadline on Monday.

Pfizer promised it would not try to snare AstraZeneca in a hostile takeover after the firm’s board turned down the US firm’s final bid.

Under financial rules, the deal cannot be revived for three months if AstraZeneca wants to agree a deal, or six months if only Pfizer wants to strike a deal.

AstraZeneca said it rejected Pfizer’s final, increased bid because it undervalued the company, but the refusal also followed strong concerns expressed by MPs and drugs experts on the future of the UK firm after acquisition.

‘Inadequate offer’

Leif Johansson, chairman of AstraZeneca, said he turned down Pfizer’s last approach “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”.

Mr Johansson said he had made clear in discussions with Pfizer that his board could only recommend a bid that was at least 10 per cent above the offer of £53.50 per share made by Pfizer, or £58.85.

Pfizer has failed to make a compelling strategic, business or value case Leif Johansson, chairman of AstraZeneca

Pfizer wanted to create the world’s largest drugs company, with a headquarters in New York but a tax base in Britain, where corporate tax rates are lower than in the United States.

Pfizer’s proposed takeover would have been the largest ever foreign acquisition of a British firm, but said its £70bn bid was final and could not be increased. It said it would not make a hostile offer directly to AstraZeneca shareholders and would only proceed with an offer with the recommendation of the AstraZeneca board.

In a statement on Monday, Mr Johansson added: “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.

“From our first meeting in January to our latest discussion yesterday, and in the numerous phone calls in between, Pfizer has failed to make a compelling strategic, business or value case.”