NEW YORK (TheStreet) -- It's the second time in a little more than a quarter that Pfizer (PFE) has tried to reach out to AstraZeneca (AZN) for a takeover bid in a deal valued at more than $100 billion. But to its despair, Pfizer hasn't succeeded in generating the kind of interest from AstraZeneca as it would have hoped. AstraZeneca continues to give a cold shoulder to Pfizer's advances.
What's the hang-up really?
In a statement issued by AstraZeneca after Pfizer's announcement, the company said, "In the absence of a specific and attractive proposal (read price), it was inappropriate to engage in discussions with Pfizer."
The company further said that the deal valued at approximately $100 billion does not adequately compensate the company's strong and diversified product line and future growth potential.
In the last few years, Pfizer's CEO Ian Read has undertaken a major restructuring drive and in many ways has shrunk the company's size. From spinning off its animal healthcare arm Zoetis (ZTS) into a separate company, to selling its nutrition and wholesale pill manufacturing units, Read's underlying message has always been one of creating a leaner and more focused company.
Considering this strategy, Pfizer's overtures to AstraZeneca are completely opposite to its recent actions. Yet Pfizer's CEO Read insists the proposed acquisition creates substantial synergies for the combined entities. The merger, if effected, will not only create the largest drug company in the world, but allow the combined entity to save millions in potential cost synergies and taxes, bolster its presence in key high growth emerging markets, and add a substantial number of important drugs to its portfolio of existing cancer, diabetes, and cardiovascular disease therapies.