Pfizer Steps up $100 Billion Bid for Astrazeneca

Pfizer Inc. confirmed Monday that it made a renewed approach to AstraZeneca PLC regarding a takeover valued at nearly $100 billion, but the U.K.-listed pharmaceutical firm had declined to engage in talks.

The U.S. drug giant added that it is currently considering its options.

Pfizer said it had originally approached AstraZeneca in January about a possible merger of the two companies and they held “high-level” talks, but these were discontinued on Jan. 14. Pfizer said it made its second approach on April 26.

Pfizer’s previous proposal made to the board of AstraZeneca on Jan. 5 included a combination of cash and shares in the combined entity, which represented an indicative value of GBP46.61 ($76.62) per AstraZeneca share and a premium of 30% to AstraZeneca’s closing share price of GBP35.86 on Jan. 3.

The indicative price would value AstraZeneca at about GBP58.73 billion, or $98.68 billion.

Pfizer said that if the deal goes ahead the two companies would be combined under a new U.K.-incorporated holding company, with management in both the U.S. and U.K. It would maintain its head office in New York and list its shares on the New York Stock Exchange.

“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,” said Pfizer Chief Executive Ian Reed. “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.”

“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,” Mr. Reed added.

The Wall Street Journal reported earlier that Pfizer plans to pursue a bid for AstraZeneca, citing people familiar with the matter, eyeing a tie-up that would create a pharmaceutical giant and fuel an already booming year for merger-and-acquisition activity, particularly in health care.

A pairing of Pfizer and AstraZeneca would create a company with drugs treating most of the major maladies, including diabetes, heart disease and rheumatoid arthritis. It would combine Pfizer’s targeted cancer therapies, such as Xalkori treating a form of lung cancer, with AstraZeneca’s promising drug that aims to attack cancer using the body’s immune system. The industry considers such immunotherapies to be the next wave of lucrative cancer treatments.

Pfizer’s interest comes during a rush of deal making, particularly in health care. Last week, announced deal volume world-wide crossed $1 trillion for this year. That made this the fourth-quickest year to cross the trillion-dollar mark and the fastest since 2007, according to data provider Dealogic.

Just last week, Valeant Pharmaceuticals International Inc. announced its offer to buy rival Allergan Inc. for nearly $46 billion, while Novartis AG sealed more than $20 billion in deals to sell and exchange businesses with GlaxoSmithKline PLC and Eli Lilly & Co.

Source: Market Watch