Pfizer-Astra: a record takeover?
American drug giant Pfizer will need to raise its offer if it is to buy Britain's AstraZeneca.

America's drug giant Pfizer, the maker of Viagra, confirmed this week that it is pursuing its British rival AstraZeneca (AZ). Pfizer said it made a $100bn cash-and-shares offer in January, which AZ says was far too low.
Having gone public, the US giant now has a month to make a formal offer. If successful, this would be the biggest foreign takeover of a UK company to date.
What the commentators said
Still, AZ will insist on a higher price, with Pfizer needing to offer at least £50 a share versus January's £46.61 offer, reckoned Citigroup's Andrew Baum.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The deal has "some strategic merit" for Pfizer, said Helen Thomas in The Wall Street Journal. It will give its oncology portfolio a hefty boost and bulk up its cardiovascular and diabetes medicine divisions. But ultimately "this looks like a deal made possible by financial engineering".
Pfizer can sidestep US taxes on both corporations and overseas earnings. If it buys AZ with enough of its own shares, it can re-domicile for tax purposes to Britain, where corporation tax of 21% compares favourably with its current effective rate of 27%. And its overseas cash pile, which would incur taxes if repatriated, would be protected.
While Americans may be irked by a US multinational going abroad to dodge taxes, Britons will fear that "Pfizer supports British erections but not British jobs", as Jonathan Guthrie put it in the FT.
The last time Pfizer made a big purchase, of rival Wyeth in 2009, it led to the loss of 2,400 jobs. We are about to find out, said the FT's Lex, who has "a greater capacity for indignation: a British politician or an American one".
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.
After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.
His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.
Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.
-
UK-US trade deal announced: US cuts tariffs on UK car imports to 10%
Keir Starmer and Donald Trump have announced a UK-US trade deal, but the US president has refused to lift baseline tariffs on most UK goods. What does it mean for the UK?
-
How to use mid-caps to diversify from the US
Medium sized companies are overlooked by investors but could offer an attractive ‘sweet spot’. We consider the case for mid-caps amid market volatility.