Pfizer Drops Attempt At Acquiring AstraZeneca

Pfizer Drops Attempt At Acquiring AstraZeneca

Pfizer announced recently that it is backing out of its proposal of acquiring AstraZeneca. The decision of the company follows the rejection of its proposal by the board of the AstraZeneca. The announcement brought relief to thousands of workers based in Delaware.

The second-largest drug manufacturer in the world was given until 5 PM London local time to make a solid offer for the company. However, after it declared that it does not intend to make an offer, it cannot make any other offer for the next six months, according to UK law. However, it can extend an offer after ninety days provided that AstraZeneca will invite it to make another offer.

Governor Jack Markell of Delaware said the announcement offers additional certainty to the AstraZeneca employees based in Delaware.

There are 2,600 employees of AstraZeneca who are based in Delaware. Most of these employees work at the headquarters of the company in North America. The Fairfax site of the company only has 2,000 employees following some layoffs.

When Governor Markell and Governor Martin O’Malley of Maryland asked Pfizer if the company intends to lay off workers before the potential acquisition of AstraZeneca, the drug company did not make any promises. Since the company is looking for more avenues for growth, analysts revealed that it may try to purchase Astra Zeneca again.

The director of the Weinberg Center for Corporate Governance at the University of Delaware, Charles Elson, said once companies have put in some effort in acquiring other companies, it will rarely walk away from it. It may take at least one year before it can be said that Pfizer will not pursue its attempt at acquiring AstraZeneca.

Pfizer has been attempting to acquire AstraZeneca since January. The acquisition will supposedly result to a stronger company. The last offer of the manufacturer of Viagra and Lipitor was supposedly convincing and showed the full value of AstraZeneca, according to Ian Read, CEO and Chairman of the drug manufacturer.

However, the offers of the company were repeatedly rejected by AstraZeneca, which indicated that the company and its range of experimental drugs were considerably undervalued. The decision of the drug company to withdraw its intention of acquiring AstraZeneca was a temporary retreat, according to Ross School of Business professor Erik Gordon.

Gordon said he will be surprised if Pfizer will not make another attempt at acquiring AstraZeneca.

Posted by James Fried on Wednesday May 28 2014, 5:00 AM EDT. Ref: USA Today. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0