Financial News

  • 3 May 2014, 13:11

AstraZeneca Rejects New £63bn Pfizer Bid

The board of AstraZeneca has rejected "without hesitation" an increased offer of £63bn from its larger US rival Pfizer.

The UK drug maker said the increased Pfizer offer of £3bn still undervalued the pharmaceutical firm.

Chairman Leif Johansson said: "Pfizer's proposal would dramatically dilute AstraZeneca shareholders' exposure to our unique pipeline and would create risks around its delivery.

"As such, the board has no hesitation in rejecting the proposal."

Pfizer boosted its bid for AstraZeneca on Friday morning and released the contents of a letter sent to the Prime Minister.

In the letter to David Cameron, Pfizer said it would commit to establishing the combined firm's corporate and tax residence in Britain.

Scottish-born Pfizer chief executive Ian Read said: "We believe the industrial logic for a combination between Pfizer and AstraZeneca is compelling."

It added that it would employ a minimum of 20% of the combined company's research and development (R&D) workforce in the UK.

The New York-based†firm also said there would be a scientific research hub based in Cambridge and manufacturing production would remain in Macclesfield.

Mr Read said resources would be devoted to the R&D "golden triangle" of Oxford, Cambridge and London would represent a vital component of the new company.

Pfizer said: "We would like to assure the government of our long term commitment to the UK where Pfizer already employs a significant number of colleagues across research, commercial, and administrative roles."

Pfizer upped its bid for the British firm to £50-a-share after the original £46.61-a-share offer was rebuffed.

Shares in AstraZeneca rose by 0.54% on Friday trades in London after the rejection was announced. Its shares have risen by 16% in a week.

The US company's pursuit of its rival would create the world's biggest pharmaceuticals conglomerate and comes amid a wave of deals in the healthcare sector.

AstraZeneca has a variety of new cancer treatments under development and the products would boost Pfizer's position.

Basing the new merged group in the UK would also offer the American firm certain tax savings.

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