May.27 - Shares in AstraZeneca fell 2.3 percent after U.S. drugmaker Pfizer said it would not make a formal bid to acquire its smaller British rival. But, as Ciara Sutton reports, many believe Pfizer may try again later this year.
The merger would have created the world's largest drugs company. But there was no last minute increased offer from Pfizer - and it has abandoned its attempt to buy AstraZeneca. The attempted biggest foreign takeover of a British firm was always set to be politically charged, especially when it gives Pfizer a conveniently reduced tax bill, says CMC's Michael Hewson. (SOUNDBITE) (English) "It was really about a tax inversion deal and I think when you are looking for value, and when you're looking at the track history of Pfizer, the fact that over the past ten years this company has spent over 250 billion dollars on takeovers, and actually is now worth 185 billion dollars, I think really the numbers didn't add up. I think the board at AstraZeneca felt that it was in the best long term interests of the shareholders to push back on Pfizer." British rules now require a cooling-off period, but this may not be the end. AstraZeneca could reach out to Pfizer after three months and vice versa after six months. The British firm's share price fell 2% as markets opened. That - and how hard shareholders push - could now be key. Jeremy Batstone-Carr from Charles Stanley. (SOUNDSBITE) (English) DIRECTOR AT, CHARLES STANLEY, JEREMY BATSTONE-CARR, SAYING: "It's going to be a big issue now I think for AstraZeneca to convince shareholders that 55 pounds per share was undervaluing their business." Pfizer had its eye on several cancer medicines. But AstraZeneca says it wants to focus on growth as an independent company. The proposed transaction prompted fierce opposition from politicians in Britain, the U.S and Sweden - there were fears for thousands of jobs. But ultimately, it was price that dealt the final blow - AstraZeneca wanted at least 58 pounds per share. So - for now at least - Swiss company Novartis remains the world's largest drugmaker by sales.