As expected, Pfizer allowed its $119 billion offer for AstraZeneca to expire without making a counter offer. The deadline is required under British law. Pfizer, earlier in the month announced, it had made its final offer.
Leif Johansson, Chairman of AstraZeneca, stated: “We note Pfizer’s confirmation that it no longer intends to make an offer for AstraZeneca. We welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company. We are fully focused on the delivery of our strategy. We have attractive growth prospects and a rapidly progressing pipeline. In the coming months, we anticipate positive news flow across our core therapeutic areas, which underpins our confidence in the long-term prospects of the business.”
“We continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us. As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy. We will continue our focus on the execution of our plans, bringing forth new treatments to meet patients’ needs and remaining responsible stewards of our shareholders’ capital,” said Ian Read, CEO of Pfizer.
AstraZeneca faces some unhappy shareholders who would have taken the Pfizer offer. However, the pressure was not sufficient to force the company to return to the negotiating table. For its part, Pfizer stopped short of offering a higher offer demanded by the AZ board. No other bidder emerged.
Both Pfizer and AstraZeneca are under pressure to rebuild product pipelines that have been hit hard by patent expiration issues. Pfizer did cite a promising AstraZeneca pipeline for cancer drugs as one reason for its offer.
Pfizer’s offer was driven, in part, by a plan to seek tax breaks through a plan to put the headquarters of the combined companies in the United Kingdom. Pfizer is based in New York City.
AstraZeneca is based in London, but plans to move its headquarters to the university of city of Cambridge, where it will cluster British research and development operations.
AZ employs an estimated 2,600 in Delaware, with that number dropping to 2,000 when a restructuring is completed. AZ has essentially halted all research in Delaware, but does maintain a manufacturing site near Newark that is slated to see a $100 million investment.
Gov. Jack Markell, concerned that Pfizer had not released plans for Delaware operations earlier demanded that the company disclose its intentions should a merger take place. Markell was joined by Maryland Gov. Martin O’Malley, who made similar demands. Pfizer never responded to the demands.
AstraZeneca’s Medimmune operations in suburban Washington, D.C. would see a gain in employment from the restructuring.
