AstraZeneca has turned down what Pfizer calls its “final” take over bid.
The AstraZeneca board said “no” to a $119 billion offer that would create the world's biggest drug company according to sales figures. The bid was a 15 percent increase of Pfizer's previous offer.
In a statement, AsrtaZeneca Chairman Leif Johansson called the offer “inadequate,” adding its presented significant risks for his company’s shareholders. He also noted concerns that the deal would have “serious consequences for the Company, our employees and the life-sciences sector in the UK, Sweden and the US.”
Pfizer’s efforts to acquire AstraZenaca have drawn concern for Delaware political leaders in recent weeks.
Gov. Jack Markell joined Maryland Gov. Martin O’Malley in sending a letter to Pfizer CEO Ian Read regarding the impact such a move would have on AstraZeneca jobs in their states.
Delaware’s Congressional delegation sent a similar letter to Read and Senator Chris Coons joined five of his Senate colleagues last weekin writing the Federal Trade Commission and Department of Justice urging those agencies to review the anti-trust, anti-consumer, and tax-avoidance implications of an acquisition.
The lawmakers suggested a Pfizer’s take over would allow the company to avoid US corporate taxes through AstraZeneca’s British home base.
And while it appears the Delaware dodged a bullet in this case, at least for the time being, Senator Tom Carper (D-Delaware) says Pfizer’s pursuit of AstraZeneca is a wake-up call that corporate tax reform is needed to make the US more competitive with other countries that tax at a lower rate.
“Corporate income taxes in other major countries are considerably less than the top rate in America. Our top corporate tax rate is 35 percent. In England, a company is looking at 21-22 percent. That’s hard to compete with and what we have to do is get serious about corporate tax reform – broaden the base, eliminate some of the tax credits, tax deductions, the loopholes, [and] lower the rate,” Carper said.
Delaware's senior Senator adds it’s a key issue for the First State.
"Delaware has frankly more at stake in this than other states do," said Carper. "Close to 40 percent of Delaware’s revenue base relates to corporation franchise tax and the related fee that flow from the hundreds and hundreds of thousands of companies from all over the world that are incorporated in Delaware."
AstraZeneca's North American headquarters is Fairfax, just north of Wilmington. The company employs approximately 2,600 people in the Delaware at that site and elsewhere in state.
AstraZeneca stock was down 12 percent in trading Monday on news of the rejection of Pfizer's offer.