- Our Town
Pfizer pulls plug on push to buy AstraZeneca
By Alex Veiga, The Associated Press
Pfizer said Monday that it does not intend to make a takeover offer for British drugmaker AstraZeneca, pulling the plug for now on what would have been the largest deal in the industry's history.
The announcement came a week after AstraZeneca's board rejected a $119 billion buyout proposal from Pfizer, the world's second-biggest drugmaker by revenue.
Pfizer had until 5 p.m. local time in London on Monday to extend a firm offer for AstraZeneca or declare its intent not to do so. Under U.K. law, Pfizer now cannot make another offer for six months.
Pfizer, the maker of Lipitor and Viagra, has been courting No. 8 AstraZeneca since January, saying their businesses would be stronger together.
Last week, it raised its stock-and-cash offer for a third time this year, to $93 per share. But AstraZeneca rejected the bid just hours later, saying it undervalued the company, which has promising new drugs in the pipeline.
On Monday, Pfizer Chairman and CEO Ian Read reiterated that Pfizer's last offer "was compelling and represented full value for AstraZeneca, based on the information that was available to us," he said.
Pfizer has said it would not mount a hostile takeover bid. The company had previously said that its proposed offer could not be increased unless AstraZeneca engaged in discussions and recommended the deal to its shareholders before Monday's deadline.
In a statement, AstraZeneca Chairman Leif Johansson acknowledged Pfizer's decision.
"We welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company," Johansson said.
A Pfizer-AstraZeneca combination would have represented the richest acquisition ever among drugmakers and the third-biggest deal in any industry, according to figures from research firm Dealogic.
AstraZeneca repeatedly rejected Pfizer's offers, insisting they significantly undervalued the company and its portfolio of experimental drugs. The company and British government officials also had raised concerns about the prospect of job cuts, facility closures and losing science leadership in the U.K., where London-based AstraZeneca is the second-biggest drugmaker behind GlaxoSmithKline PLC.
Pfizer slipped from the world's largest drugmaker to No. 2 last year, behind Novartis AG, mainly because Lipitor got generic competition at the end of 2011, wiping out several billion dollars in annual sales.
Pfizer also has sold off a couple parts of its business and reorganized as part of preparations to possibly break off another part of the company, something analysts have been urging it to do.
Still, it's developed a track record for flexing marketing muscle and pulling off mega mergers, which together have repeatedly propelled it to the top.
Since 2000, it's done three acquisitions that vaulted the company to No. 1 in revenue. It paid $111.8 billion for Warner-Lambert Co. in 2000 to get the rights to Lipitor, then $59.8 billion for Pharmacia Corp. in 2003 and $68 billion for Wyeth in 2009, according to Dealogic.