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Pfizer's better offer rejected

May 2, 2014

Hours after US pharmaceutical giant Pfizer upped its offer for British-Swedish competitor AstraZeneca, the latter rejected the takeover attempt. It said the bid did not reflect the company's real value.

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Image: Timothy A. Clary/AFP/Getty Images

AstraZeneca's board said Friday it had rejected an improved $106-billion (76.5-billion-euro) takeover offer from US drugmaker Pfizer, saying the bid announced just hours earlier undervalued the firm.

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

Pfizer had raised its takeover bid earlier on Friday, after seeing its first proposal rejected.

The US pharmaceutical company, best known for the production of Viagra, had said it was now offering 50 pounds per share, an increase of 7 percent over its first bid.

A merger of heavyweights

A successful merger would have marked the largest acquisition in the pharmaceutical sector in many years. Pfizer and AstraZeneca would have had a combined workforce of 120,000.

In a letter to British Prime Minister David Cameron, Pfizer executives had promised to keep the country's corporate and tax residence in the UK, adding the "golden triangle of Oxford, Cambridge and London would represent a vital component" of the deal.

US Companies Hoarding Untaxed Cash

The US company indicated it would build AstraZeneca's planned research and development center in Cambridge, trying to allay fears in the government about job losses, should the takeover go ahead.

hg / kpc (Reuters, dpa)