AstraZeneca’s shares increased 15% on Monday morning, after US drugs giant Pfizer announced its interest in acquiring the UK company. This is the second time the company has approached AstraZeneca within a short time frame. City analyst, Andrew Baum, believed that there was now a 90% chance that Pfizer would achieve its objectives.
Pfizer approached AstraZeneca in January, with an offer worth $58.6bn, which was declined. However in a statement released by Pfizer it announced that it had approached the company once again on Saturday, declaring its interest in the company. AstraZeneca once again declined to engage, resulting in Pfizer ‘currently considering its options with respect to AstraZeneca’. These options are multiple, however it could result in a bid turning hostile and with Pfizer making their intention public knowledge, putting pressure on AstraZeneca to open discussions, it could appear to many that they are hitting hard in their bid to takeover AstraZeneca. Pfizer now has until May 26th, under UK Takeover Panel rules to declare its definitive intention on AstraZeneca, or walk away from the bid.
AstraZeneca is a key UK firm and whilst Pfizer’s CEO Ian Read stated that “we have great respect for AstraZeneca and its proud heritage…in both the United Kingdom and Sweden”, if the deal were to go ahead it would be the biggest takeover of a UK company. Raising fears over the implications of loss in investment and expertise within the British life sciences sector.
According to Bloomberg, an acquisition of AstraZeneca would ‘add to the $127 billion of mergers in the pharmaceuticals sector this year’. With activity increasing last week and deals being announced between GSK and Novartis the Pharma M&A market seems to be generating a buzz. It will be interesting to see how this bid of interest plays out and what the repercussions will be across the global pharma market.
Andrew Forman, Global Life Sciences Sector Resident at Ernst & Young, will be speaking at Terrapinn Briefings’ inaugural Pharma M&A Briefing in London on 10th June, on the topic of Pharma Firepower. In particular, as part of the session, he will be evaluating the role that Firepower plays in M&A deals and how companies can boost their ability to take advantage of current strategies. If you are interested in this subject you can’t afford to miss it. Click here for more information.