Financial News

  • 2 May 2014, 9:21

Pfizer Ups Bid For AstraZeneca By 3bn

US drugs giant Pfizer has raised its offer for British rival AstraZeneca - and written a letter to the Prime Minister about its planned tax status.

Pfizer said it would offer an additional 3bn on top of the original bid of 60bn for the UK firm, made last week.

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 in the letter: "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.

It 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.

New York-based 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 offer was rebuffed - valuing AstraZeneca at 63bn.

Shares in AstraZeneca rose by just under 1% in early Friday trades in London. Its shares have risen by 16% in a week.

The British company responded to the bid increase saying its board would review the latest offer before urging shareholders to ignore the new offer.

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.

But the takeover, which would be the largest acquisition of British company by a foreign business, has stirred political controversy.

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