NEW YORK – U.S. drugmaker Pfizer (IW 500/22) said on Monday it had abandoned its controversial bid to acquire British rival AstraZeneca (IW 1000/57) after its final $117 billion offer was rejected last week.
The announcement was the latest twist to a long-running saga that drew widespread attention over fears that British jobs and research capability would be lost and accusations that the tie-up was a cynical ploy by Pfizer to pay less tax.
Pfizer's takeover would have been the biggest deal of its kind in the pharmaceutical industry.
"Following the AstraZeneca board's rejection of the proposal, Pfizer announces that it does not intend to make an offer for AstraZeneca," the New York-based company said in a statement.
Pfizer had said that the combined company would deliver an expanded product pipeline, deep potential cost cuts and significant tax savings.
"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," said Ian Read, chairman and CEO of Pfizer. "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."
Pfizer's proposal also included a controversial plan to re-domicile the combined company in Britain for tax purposes, in a move that would help it avoid paying billions of dollars in tax to the U.S. government.
AstraZeneca chairman Leif Johansson had attacked the U.S. pharmaceutical giant's pursuit of the firm, decrying it as "fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimisation."
'Culture of Innovation'
Responding to Pfizer's withdrawal on Monday, Johansson said AstraZeneca "would continue building on the momentum we have already demonstrated as an independent company."
"We have attractive growth prospects and a rapidly progressing pipeline," Johansson said. "AstraZeneca has a culture of innovation, with science at the heart of everything we do."
AstraZeneca chief executive Pascal Soriot had resisted the Pfizer overtures, bullishly advising shareholders that the company's revenues would almost double to $45 billion by 2023.
But analysts have expressed skepticism that Soriot's forecasts will prove accurate, speculating that AstraZeneca's sales by 2023 would remain in the range of $28 billion to $31 billion.
Pfizer's play for AstraZeneca comes as global pharmaceutical giants maneuver to cope with lost revenues from public-sector cutbacks in health care and patent expirations.
But Pfizer's withdrawal does not necessarily signal the end of the company's pursuit of AstraZeneca, although under British law the U.S. company must now wait six months before tabling another offer.
It could also make a higher bid in three months if AstraZeneca's board agrees to a fresh round of takeover talks.
Monday's developments did not immediately impact the U.S. and London stock markets, which were closed due to holidays. Pfizer's share price had slipped by 0.6% in Friday's trade to $29.49.