LONDON (dpa-AFX) - Pfizer Inc.'s (PFE) Chief Executive Officer Ian Read said that the company's proposed takeover of British drug maker AstraZeneca Plc (AZN.L, AZN) would be a 'win-win' for society and shareholders.
In a series of videos posted on Pfizer's website, Ian Read said that the deal would liberate the balance sheet and tax of the combined companies and that will allow them to have great cash flow and together be a stronger company, and together be able to invest in research, and in development, and with the scientific community.
Mr. Read said the proposed takeover was motivated by three components of value, including combining some of the companies' products and improving efficiency.
Mr. Read also stated that the proposed combination of AZ meets the scientific needs, needs of efficiency, needs of strengthening balance sheet and strengthening fiscal position, and it allows AZ shareholders to: number one, get an immediate benefit from the cash that the company would pay them, it allows them to participate in a very strong combined company with great cash flows and great portfolio, and it allows a very efficient allocation of capital by the company.
Mr. Read noted that governments are all around the world pressurizing the industry to produce products of higher value and with more productivity, at lower cost. So one way of doing that is to consolidate and is to take out overlapping functions.
Mr. Read, said, 'when we looked at AZ, we liked their science. We liked where their science is being done, which is in the UK, and we know we have good science in the UK in the Cambridge, Oxford, London and other universities. So we liked the science, we liked the complementary nature of the portfolio, and frankly you know, as far as we know, we believe the cultures are very complementary. And one of the most important things that you do when you do a combination is you need to believe that the cultures are similar, so you can do it quickly and you can come out with a combined company that clearly understands its objectives and is ready to go.'
AstraZeneca earlier this month rejected Pfizer's sweetened offer of 50 pounds per share or $84.47 per share, up from its prior offer of 46.61 pounds or $76.62 per share. The revised offer reportedly valued AstraZeneca at $106 billion.
Mr. Read and Pascal Soriot, CEO of AstraZeneca, will reportedly testify to U.K. lawmakers next week amid political tension over public-interest issues related to the takeover.
U.K. Chancellor of the Exchequer George Osborne reportedly said that the government wants to clarify what a deal would mean for British scientific research and jobs. Lawmakers are prepared to negotiate hard as they engage both companies.
Reports said that Read may soon also face government inquiries in the U.S. Pfizer reportedly said it plans to keep the company's operating headquarters in the U.S., even as its legal address shifts to the U.K. for the lower tax rate.
PFE closed Friday's trading at $29.03, down $0.14. However, In after-hours trading, the stock increased $0.03 or 0.10 percent ended at $29.06.
AZN closed Friday's trading at $77.24, down $1.50 or 1.91% on the NYSE. But, In after-hours trading, the stock increased 0.01 percent ended at $77.28.
In London, AstraZeneca closed down 2.39 percent on Friday at 4,600 pence.
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