OFweek Medical Network: Pfizer, the global pharmaceutical giant, won a majority stake in Redvax GmbH in 2015. The acquisition of CMV vaccine will further improve Pfizer's layout in the vaccine field. Another $17 billion was spent on the annexation of Hospira to strengthen the biosimilar pipeline, which was the largest deal after Pfizer’s $117 billion acquisition of AstraZeneca failed. Immediately after May 11, Pfizer took over the acquisition of AM-Pharma, a private pharmaceutical company in the Netherlands. At present, the market is rumored to acquire GlaxoSmithKline (GSK) for $146 billion. If the deal is finalized, it will once again refresh Pfizer's acquisition record.
Prior to this, Pfizer CEO Ian Read repeatedly said that he was eager to boost Pfizer's sales with big deals, and that Ian Read chose to buy the other side of the Atlantic. GlaxoSmithKline became a Pfizer-compliant condition after AstraZeneca. One of the few M&A targets.
On May 20th, Deutsche Bank analyst Gregg Gilbert wrote to investors in the "Introduction to Pfizer-Grace Susie" report that the acquisition of GlaxoSmithKline will bring "great value" to Pfizer's income. Such a big deal can also give Pfizer a large asset and lower taxes.
Gilbert believes: "We believe that Pfizer has a sense of urgency and hopes to increase the company's assets and create value through large-scale acquisitions. After reanalysis, we believe that Pfizer and GlaxoSmithKline will merge."
Gilbert and his colleagues gave a guide price for the acquisition: 1924 pence per share, which is equivalent to a total price of 95 billion pounds, or about 146 billion dollars, estimated to be half of the cash and half of the equity.
In fact, the rumor that Pfizer wants to buy GlaxoSmithKline is not the first time. After AstraZeneca rejected Pfizer’s $117 billion takeover offer in 2014, there was a market rumor that Pfizer turned its acquisition to a deeper At the bottom of the British medicine company GlaxoSmithKline, Pfizer wants to buy GlaxoSmithKline at a premium of about $164 billion over the company's valuation of 45%.
The rumors that Pfizer wants to buy GlaxoSmithKline at a high price have come back. Although Pfizer and GlaxoSmithKline spokespersons have denied the merger of the two companies, there is still a certain possibility for Pfizer to acquire GlaxoSmithKline.
Three incentives to promote Pfizer's acquisition of GSK
First, Pfizer's acquisition of GlaxoSmithKline can reduce the tax rate, which is the same reason that it chose to acquire Asley. Due to differences in tax policies between the United Kingdom and the United States, Pfizer operates or acquires companies in the United States, which requires approximately 27% of the profits to be paid each year. In the UK, only 21% of profits are required, and the difference in tax rate is 6% multiplied by the large number of mergers and acquisitions. Undoubtedly will bring a very considerable difference in profits. Previously, Pfizer executives revealed that the company did not rule out tax inversion transactions.
In addition to the incentives for reasonable tax avoidance overseas, the strong complementarity of the product line is also an important reason for Pfizer to select GlaxoSmithKline. In terms of product structure and valuation trends, GlaxoSmithKline has good product preparation in the field of respiratory system. If Pfizer can acquire GlaxoSmithKline, it can enhance the existing vaccine business and help it to take the lead in the respiratory field. The advantages. It is worth noting that GlaxoSmithKline and Novartis have completed a $22 billion asset swap transaction, and GlaxoSmithKline has received a vaccine business from Novartis in addition to the flu vaccine. At the same time, the temporary alliance of “GSK+Nova†will establish a consumer health joint venture company, and GSK as a controlling party is bound to make a big impact in this field. The consumer health field was announced by Pfizer a few years ago.
In recent years, patented drugs have faced patent cliffs. This situation will reach its peak in 2016, and biopharmaceutical giants are unlikely to make up for this problem only through research and development. Therefore, major biomedical giants must choose mergers and reorganizations to enhance them. The ability to cope with competition, for Pfizer, the pressure of its own patent cliff has made it a thin ice, with the world's first overweight billion-dollar drug Lipitor 2011 patent expired, Lipitor in 2012 The annual sales volume is “waistâ€, and in 2013, “waist†again. In 2014, Pfizer’s other iconic drug, Viagra (commonly known as “Viagraâ€), also expired.
Therefore, Pfizer needs to seek new profit growth points. In May 2015, Pfizer's Zyvox also faced patent expiration. Although GlaxoSmithKline's Avodart will face patent drug expiration in November 2015, it faces a severe patent cliff. However, Pfizer's acquisition of GlaxoSmithKline will complement Pfizer's product chain and enhance its research and development capabilities.
Five major mergers and acquisitions
First of all, compared to Pfizer's acquisition of AstraZeneca, the acquisition of GlaxoSmithKline is more difficult. The total product line of GlaxoSmithKline is larger and the product structure is relatively mature. Pfizer wants to have so many businesses in the world. The entire acquisition process takes a long time.
Secondly, Pfizer’s attempt to acquire AstraZeneca was investigated by the British government for “monopolyâ€, and the company that Pfizer wants to acquire is the largest generic drug manufacturer in the UK and will still cause the British government. Attention.
Third, in addition to Pfizer's digesting of GlaxoSmithKline, it is necessary to clarify the troubles of competition in the industry caused by the replacement of the assets of the three major pharmaceutical companies. In April 2014, the three major pharmaceutical companies, Lilly, GlaxoSmithKline and Novartis Pharmaceuticals, announced that the product line was replaced. Among them, Novartis acquired GlaxoSmithKline's entire tumor product line for US$14.5 billion, which is Pfizer's most important therapeutic field.
The fourth major obstacle is the US government's fight against tax inversion. Since September 22, 2014, the Obama administration has introduced new tax regulations and severely cracked down on “tax inversion†transactions. The tax inversion refers to the way companies change their place of registration (from high-tax countries to low-tax countries), which should be applicable. The relatively high tax rate becomes a relatively low tax rate for tax avoidance purposes. In addition, tax inversion can also be completed through business transfer after overseas mergers and acquisitions. Although there are multiple reasons for Pfizer's $117 billion acquisition of AstraZeneca, the Obama administration's severe tax inversion is one of the reasons. If the rumor comes true, Pfizer's big acquisition of GlaxoSmithKline will once again face the Obama administration's crackdown. Tax inversion transactions.
In the fifth aspect, once the merger is completed, Chinese regulators may fine-tune their business in China because of anti-monopoly requirements. According to Article 19 of the Anti-Monopoly Law, which came into effect on August 1, 2008: the total market share of the two operators in the relevant market is two-thirds, and it can be presumed that the operators have market dominance. Once judged to have a dominant market position, it will be subject to a series of restrictions.
China is very sensitive to the issue of controlling consumer prices, so there is no guarantee that the combined market share of a company in a particular field will constitute a “market dominanceâ€. If so, the two parties to the transaction are at a disadvantage in the review of the Ministry of Commerce and need to adjust their business in China, such as splitting business.
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