Before market open, shares of AstraZeneca had spiked 17.1% to $80.43.
In a statement, Pfizer said it had previously offered to purchase the biopharmaceutical company in January for 46.61 British pounds (or $76.62) a share, a transaction offered in cash and stock. At the time, the offer represented a 30% premium to AstraZeneca's share price. Pfizer said AstraZeneca declined to pursue negotiations after "limited high-level discussions." However, in late April, Pfizer contacted AstraZeneca to pursue discussions "in light of recent market developments."
"The combination of Pfizer and AstraZeneca could further enhance the ability to create value for shareholders of both companies and bring an expanded portfolio of important treatments to patients," said Pfizer CEO Ian Read in a statement. "A potential combination with AstraZeneca aligns with Pfizers current structure and fully supports its existing strategy to build world-class businesses."
A possible transaction would be accretive to Pfizer's adjusted earnings in the first full fiscal year following the combination. Pfizer noted synergies could be achieved through greater capital efficiency and a more efficient tax structure. The current contemplated structure would be a new U.K.-incorporated holding company.
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