Pfizer sweetens takeover bid for AstraZeneca

US pharmaceuticals giant increases takeover offer for British drug producer to US$106 billion, aimed at combining resources in research

PUBLISHED : Saturday, 03 May, 2014, 4:00am
UPDATED : Saturday, 03 May, 2014, 7:46am


US pharmaceuticals giant Pfizer has raised its takeover offer for Britain's AstraZeneca to about US$106 billion, it said yesterday.

The Viagra maker said in a statement it had lifted its informal offer to £50 (HK$655) per AstraZeneca share from £46.61.

The tie-up between two of the world's biggest pharmaceutical groups is aimed at combining research pipelines in oncology and other key disciplines.

"Pfizer hopes that the increased proposal will provide the basis for AstraZeneca to engage with Pfizer and enter into discussions relating to a possible combination of the two companies," it said in a statement to the London Stock Exchange.

Under the revised offer, AstraZeneca investors would receive 1.845 shares in the new combined company and 1,598 pence in cash, valuing the British group at about £63 billion.

The prior bid, made in January but disclosed earlier this week, was rejected by AstraZeneca on the grounds that it "significantly undervalued" the firm.

"We have seen significant positive market reaction to the announcement we made on April 28, including from the shareholders of both our companies," Pfizer chief executive Ian Read said.

"The consistent message we have heard reinforces our belief that there is a highly compelling strategic, business and financial rationale for combining our businesses, with significant benefits for shareholders and stakeholders of both companies.

"We believe our proposal is responsive to the views of AstraZeneca shareholders and provides a sound basis upon which to arrive at recommendable terms for the combination of our two companies."

Pfizer also wrote to British Prime Minister David Cameron to pledge that it would complete AstraZeneca's proposed research and development facility in Cambridge, adding that 20 per cent of the new group's research staff would be based in Britain.

"A combined company would bring together powerful and world leading research expertise in key therapeutic areas such as oncology, inflammation, and cardiovascular and metabolic disorders," Read said in the letter.

He added that the "world class academic research resources in the 'golden triangle' of Oxford, Cambridge and London would represent a vital component, along with the positive environment for inward investment that the UK government has created".

"Ultimately, establishing the world's largest research-based pharmaceutical company in the UK, together with the commitments made in this letter represent a strong indicator of the incentives that your government has created to attract successful business to the UK."

Pfizer's attempt to buy AstraZeneca comes amid a wave of deal-making in the pharmaceutical sector as drugmakers face big sales declines due to patent expirations.