What would have been the world’s largest drug company merger has been called off last-minute by Pfizer. AstraZeneca, the company that was to be bought, refused to take up Pfizer’s final offer of £55 a share – an offer that many believed would get AstraZeneca to the table for negotiations.
“Following the AstraZeneca board’s rejection of the proposal, Pfizer announces that it does not intend to make an offer for AstraZeneca,” Pfizer said in a short news release.
Pfizer, the largest drug company in the world currently, says that it chooses not to go hostile, but would rather let the next move lie with AstraZeneca.
“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, Pfizer’s chairman and chief executive.
In accordance to British law, a “cooling-off period” has now been enacted, allowing both companies to take a break. After three months, AstraZeneca may choose to reach out to Pfizer, or Pfizer could make another offer after six months.
Despite support from some of AstraZeneca’s shareholders to follow through with the Pfizer-AstraZeneca merger, others felt that AstraZeneca’s promising drug pipeline may bolster its price in the near future.
The future of the Pfizer-AstraZeneca merger will depend on how AstraZeneca’s share price holds up through the next few weeks and how its shareholders feel about revisiting the deal in the future.
AstraZeneca’s largest shareholder, BlackRock, was a supporter of the board’s rejection of Pfizer’s latest offer; however, the company has gone on record saying that it believes the two companies should speak again in the future. Pfizer’s final offer when negotiations ceased was £69.4 billion ($118 billion).