June 11 (Bloomberg) -- Pfizer Inc. Chief Financial Officer Frank D’Amelio said the company’s $117 billion bid for AstraZeneca Plc broke down over price.
Pfizer, the largest U.S. drugmaker, set a ceiling for how much it would pay for London-based AstraZeneca and wasn’t willing to go over that limit, D’Amelio said today at an investment conference organized by Goldman Sachs Group Inc. While New York-based Pfizer can approach AstraZeneca again after a U.K. regulatory period ends in six months, D’Amelio said he couldn’t comment about whether it will do so.
D’Amelio also said Pfizer’s attempt at a mega-merger doesn’t rule out the possibility the company will instead break up into smaller parts. AstraZeneca last month rejected a takeover offer valued at 55 pounds a share.
“In a word it was price,” that kept the two companies from sealing a deal, D’Amelio said. “Any other issues that were raised during negotiations and conversations I think we were able to adequately, effectively address those.”
New York-based Pfizer was seeking to lower its tax rate through the deal by moving its official headquarters to London. The company also sought to gain from AstraZeneca’s experimental immune therapy cancer drugs, a new class of treatments that would have filled a hole in Pfizer’s product portfolio. AstraZeneca has predicted those products may help raise its annual sales by 75 percent to $45 billion by 2023.
Pfizer declined less than 1 percent to $29.43 at the close in New York and has gaining 3.6 percent in the past 12 months. AstraZeneca rose 1.2 percent to 52 pounds at the close of London trading.
D’Amelio also said Pfizer would be willing to take on more debt at the risk of its credit rating for the right deal, though it would prefer to remain investment grade.
“Will I lever up the balance sheet if necessary to get a deal done that I think will create significant value for shareholders? The answer is I would,” D’Amelio said.
Pfizer has sold its animal health and infant nutrition units in deals value at than $10 billion in the past two years.
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