Pfizer drops AstraZeneca takeover bid: American drugs giant admits defeat and scraps offer for British pharmaceutical company

US pharmaceutical giant had until 5pm to pursue bid or walk away

Deputy Business Editor

Pfizer, the US Viagra giant, has scrapped its takeover offer for Britain’s AstraZeneca, bringing an end to one of the most politically charged corporate deals in decades.

The company had until 5pm today to make up its mind on whether to formally walk away under UK takeover rules.

It now has to wait six months before launching another bid.

In a statement this afternoon, it said: "Following the AstraZeneca board's rejection of the proposal, Pfizer announces that it does not intend to make an offer for AstraZeneca."

Leif Johansson, chairman of AstraZeneca, said: "We note Pfizer's confirmation that it no longer intends to make an offer for AstraZeneca. We welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company."

He added: "The Board is grateful to Pascal, his management team and to all our employees for their dedication and focus over a period of uncertainty."

The deal’s collapse was instantly welcomed by Labour shadow Business Secretary Chuka Umunna, who was concerned from the outset about the implications for the UK’s science base.

Pfizer had taken pains to promise that 20 per cent of research and development jobs would remain in the UK, but its track record  on previous acquisitions of slashing research budgets and closing research centres still worried the science community.

Memories were still vivid of Pfizer’s closure of its big development site in Kent, where it invented Viagra.

The ghost of Kraft’s takeover of Cadbury also loomed large. That deal saw the American processed cheese giant renege on a promise not to shut a Cadbury factory soon after the takeover had gone through.

AstraZeneca’s board had flatly refused to discuss a deal with the company until it offered more than £55 a share and made clearer proposals on how the deal would avoid disrupting its potentially lucrative programme of inventing new medicines.

At the heart of the controversy was Pfizer’s admission that a key reason for the deal was for it to save tax by moving its domicile, but not its headquarters, to low-tax UK.

Some shareholders were angry that it was this, rather than the long term health of the company, that was driving Pfizer’s management. Given that a large proportion of the purchase price was to be made in shares of the combined company, investors were more concerned about the future than they would have been if it was a simple cash deal.

However, other big Pfizer shareholders including its biggest investor, BlackRock, were irritated that AstraZeneca had not engaged in talks with Pfizer.

Chuka Umunna MP, Labour's Shadow Business Secretary, said: "It is welcome that Pfizer has kept to its promise not to mount a hostile takeover of AstraZeneca, Britain’s second largest pharmaceutical company, following the rejection of its advances by the AstraZeneca Board.

 “We were clear from the start that we would judge the proposed deal on whether it was best for British science, jobs and industry.  We were not confident this was the case which was why we said the Government should subject the deal to a public interest test to determine whether it would have a material adverse impact on the UK’s science and R&D base and, if so, we argued it should be blocked.” 

The Conservatives have been keen to make it clear that this was an issue for the shareholders and company boards to decide upon rather than politicians. But they too were forced into making a show of demanding strong assurances on UK jobs.

Pfizer was also facing a growing backlash in the US, where a political head of steam appears to be building to block US companies from buying foreign companies in order to move their tax domicile to low tax havens like the UK.

At the weekend, it emerged that a US company had made a similar proposal to InterContinental Hotels Group – the British based biggest hotel operator in the world.

It is unlikely that such a deal would lead to calls for a public interest test, however.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links