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Pfizer confirms its offer for AstraZeneca

Posted on 29 April 2014

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Pfizer is close to publicly unveiling its interest in acquiring AstraZeneca of Britain, a person briefed on the matter said on Sunday, in what would be one of the biggest deals among drug makers.

The deal would probably be worth more than $100 billion, given AstraZeneca’s current market capitalization of roughly $86 billion. That would make it one of the largest-ever acquisition efforts in the pharmaceutical industry, surpassing Pfizer’s $90 billion takeover of Warner-Lambert 14 years ago.

Pfizer could declare its interest in taking over its rival within days, the person said. Such a move would be aimed at putting pressure on the British drug maker, which has turned down a number of informal takeover approaches from its competitor, including in recent months.

The pharmaceutical industry has helped push deal activity to heights unseen since before the financial crisis of 2008. On April 22 alone, drug makers unveiled $74 billion worth of potential deals, including the possible takeover of the maker of Botox and a complicated series of asset swaps between Novartis of Switzerland and GlaxoSmithKline of Britain.

The companies have been driven to deals in many cases to find new areas of growth as onetime blockbuster treatments lose patent protection. Instead of pouring money into researching new products that could sputter out, they are looking for what they hope are likely winners.

To Pfizer, AstraZeneca may be attractive because of its portfolio of cancer drugs, an area that the American company has also made a priority as it seeks to restock its product pipeline.

A takeover bid would also let Pfizer use some of the cash that it keeps abroad without incurring a big tax bill.

But the board of AstraZeneca had viewed the previous approaches as opportunistic and ill timed, with too small a takeover premium, according to a person briefed on those discussions. Pfizer’s intentions were reported earlier by The Financial Times.



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