LONDON (AP) - Shares in Anglo-Swedish drugmaker AstraZeneca jumped 15 percent on Monday after U.S. pharmaceutical firm Pfizer said it offered to buy the company for around $100 billion.
LONDON (AP) — Shares in Anglo-Swedish drugmaker AstraZeneca jumped 15 percent on Monday after U.S. pharmaceutical firm Pfizer said it offered to buy the company for around $100 billion.
Pfizer, the maker of Viagra, said that AstraZeneca rejected an initial approach in January valuing the company at about 59 billion pounds ($100 billion). The cash and shares deal would represent a 30 percent premium on AstraZeneca's closing share price of 35.26 pounds on Jan. 3, the closing price around the time the offer was made.
AstraZeneca PLC said it concluded that the proposal "very significantly undervalued AstraZeneca and its prospects."
Shares traded Monday at 46.77 pounds after the approach was revealed.
Another effort to revive discussions took place Saturday, but Pfizer said Astra did not engage.
Pfizer remains interested and is confident a combination is possible, issuing a statement to the markets underscoring the potential advantages of the deal.
"Pfizer believes the strategic, business and financial rationale for a transaction is compelling," the company said in a statement.
The deal comes as drugmakers take advantage of lower interest rates in a spate of mergers and acquisitions. One such deal last week involved Swiss drugmaker Novartis AG, which agreed to swap its vaccine business for GlaxoSmithKline PLC's cancer drug unit and sold its veterinary drug arm to Eli Lilly and Co.
Pharmaceutical companies are trying to boost sales and cut costs as many see revenue flat line or even dip due to increased competition from generic drugs and rising expenses for the development of new products.
Pfizer's bid for AstraZeneca would mark the biggest-ever foreign takeover of a British business.
AstraZeneca is currently undergoing a major research and development re-organization to offset the expiration on patents for drugs like cholesterol medication, Crestor. The company has been reducing costs and trying to make research programs more productive.