Pfizer abandons AstraZeneca effort

BY Matt Atkins

US pharmaceutical firm Pfizer has walked away from its efforts to woo British drugmaker AstraZeneca. The American giant threw in the towel shortly before 5pm on Monday 26 May, conceding that its attempts to create the world's largest pharmaceutical firm had failed. 

AstraZeneca has fiercely resisted Pfizer's campaign, which began in November last year. Backed by UK scientists and politicians, the firm's boardroom has knocked back a string of multi-billion pound offers. The UK firm rejected a final offer of £69bn, or £55 per share, saying the proposal undervalued the company and its prospects for growth.

Pfizer's campaign faced many hurdles, being mired in controversy from the off. The bid had stirred public anger on both sides of the Atlantic, after it was revealed tax savings were a key driver of Pfizer's approach. A successful takeover would have given Pfizer the chance to relocate its tax base to the UK, escaping the high rate of US corporation tax.

The US firm had come under intense pressure from the UK government, as well as unions, to spell out Pfizer's commitment to British research and jobs. The firm’ chief executive, Ian Read, spent two days of questioning from MPs on the Commons Business Select Committee and the Science Committee, giving a five-year pledge on UK jobs and facilities. In light of the tax storm surrounding the deal, these guarantees were dismissed as inadequate.

While AstraZeneca’s board can breathe a sigh of relief, the news will come as a disappointment to a number of shareholders who had wanted the firm to engage with Pfizer. Investors including BlackRock, Legal & General, Axa and Schroders made it clear they wanted the company to consider the bid, though other leading investment groups were against it. Many viewed the price per share offered as a few pounds too low. It has been widely reported that a figure above £58 may have swayed the board.

Under UK takeover rules, Pfizer cannot approach AstraZeneca for six months, although the UK firm can choose to initiate talks in three month's time. Mr Read has said the US firm does not rule out future discussions with AstraZeneca, but that it will now focus on "lots of great opportunities" including growth within the company and other potential deals.

News: Pfizer drops AstraZeneca takeover bid

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