Purchase of AstraZeneca failed Pfizer or GSK

Source: 21st century economic report: after several rounds of negotiations failed on August 6, 2014, the interest of us pharmaceutical giant Pfizer in sky price negotiation seems to have declined from AstraZeneca, the second largest pharmaceutical company in the UK, and turned to GSK, the largest pharmaceutical company in the UK, which is in the bottom Recently, a number of foreign media reported that Pfizer, which intends to reduce the tax pressure on local cash through large-scale overseas M & A, may use GSK as a "standby plan" after the failure of AstraZeneca's M & A, and the details of this plan have begun to emerge "A 45% premium over the company's valuation, about US $164 billion in negotiated offers" - it is said that Pfizer's sincerity to GSK is even higher than the previous level of US $116 billion to AstraZeneca Analysts at berlenberg bank, a well-known German investment bank, said $74 billion of the $164 billion purchase price would be paid in cash "While the acquisition may sound inconceivable, it's not impossible." The analyst said bluntly: "roughly, the acquisition will be quite cost-effective for Pfizer, especially once Pfizer can finally make the acquisition payment at the low tax rate that GSK performs in the UK The acquisition of GSK also transferred Pfizer's huge tax bill to the UK " But before Pfizer is determined to digest GSK, it is necessary to clarify the industry competition troubles caused by resource exchange among the three major pharmaceutical companies At the end of April this year, Novartis, GSK and Lilly jointly announced a major product line replacement, in which Novartis purchased the entire tumor product line of GSK at a cost of US $14.5 billion, which has always been the focus of Pfizer's treatment field Pfizer's M & A ambitions are not only compared with the higher share price segment at the beginning of this year Now the market value of GlaxoSmithKline's capital market has fallen to $118 billion, and the share price has fallen by 14% in the past year Just half a month ago, GSK was given a full year profit warning and weak quarterly figures It is reported that the company's second quarter sales fell by 13%, only 5.56 billion pounds The performance was even worse than analysts had expected This also makes it, like the former "prey" of Pfizer AstraZeneca, in a very weak valuation low range Last week, Pfizer, which now has a market value of more than $183 billion, declined to comment on whether it would continue to update its terms of purchase of AstraZeneca later this year Pfizer just stressed that it is still considering other large-scale acquisitions Previously, GlaxoSmithKline and Pfizer have established a joint venture in the field of HIV / AIDS quality, vivhealthcare However, as of the time of press release, the two companies did not respond to the rumors of M & a disclosed by the outside world Due to the differences in tax policies between the United States and the United States, Pfizer needs to turn in about 27% of its profits every year when it operates or merges enterprises in the United States, while in the United Kingdom, it only needs to turn in 21% of its profits The 6% tax rate difference multiplied by a huge number of M & A will undoubtedly bring about a considerable profit difference Pfizer executives even revealed that the company did not rule out tax reversal transactions In addition to the incentive of reasonable tax avoidance overseas, the power of product line complementary to each other is also favored by the outside world "In fact, in terms of product structure and valuation trend, GSK and AstraZeneca, the two largest pharmaceutical companies in the UK, are quite similar We also have a good product reserve in the field of respiratory therapy, and we are also in the UK where the tax rate policy is more relaxed It is very beneficial for Pfizer to acquire any of them " A senior person from the foreign pharmaceutical industry told 21st century economic news GSK's strong product line compared with AstraZeneca, there is no less than "The acquisition of GSK will greatly improve Pfizer's existing vaccine business and help it gain a leading position in the respiratory treatment sector In addition, once GSK enters Pfizer system, more mature drugs will be recombined for sale " Said the senior person In the first quarter of this year, GSK just obtained all vaccine products of Novartis, Switzerland, except influenza, for us $7.1 billion (plus other rights and interests) through resource replacement of three pharmaceutical companies The transaction was completed in the first half of this year For Pfizer, the pressure of its own patent cliff has made it walk on thin ice, and the task of seeking new profit growth point has been heavily stressed on the decision-making level of the company Take Viagra, a leading product with patent expiration in China since May this year as an example Its market share of 60% in China has been rapidly imitated by Baiyunshan Pharmaceutical and other enterprises due to the loss of patent protection, and its sales revenue has shrunk significantly The sudden drop in sales of Viagra is also frequently performed in other treatment fields such as hypertension However, unlike AstraZeneca, which is independent of many rounds of resource replacement, the global product structure of GSK has been fundamentally adjusted At the same time of harvesting a strong vaccine product line, GSK also sold its entire tumor product line for us $14.5 billion, and this high-profit treatment area that attracted the attention of the industry has always been Pfizer's core appeal At the same time, after the transfer of resources, the temporary alliance of "GSK Novartis" will establish a consumer health joint venture company, and GSK, as the controlling party, will surely play a big role in this field And consumer health is exactly what Pfizer announced a few years ago "It is more difficult for Pfizer to acquire GlaxoSmithKline than to acquire AstraZeneca The total amount of its own GSK product line is large, and the product architecture tends to be mature It will take a long time to acquire so many businesses around the world Even if the acquisition is successful in the end, whether it can be successfully digested is another matter " Shi lichen, partner of Peking University zongzong medicine, told reporters directly Every big acquisition has its pros and cons, he said Once the "Pfizer GSK" merger and acquisition case is successfully finalized, it will bring great advantages to Pfizer's layout of the Chinese market "For GlaxoSmithKline, the operational difficulties brought by the credit crisis it is facing in China can also be greatly relieved By subsidizing the tax rate differences between the UK and the US, the market pressure can be alleviated to a certain extent."