Pfizers unsuccessful takeover of AstraZeneca Essay

Pfizers unsuccessful takeover of AstraZeneca - Essay Example government to take interest and eventually intervene with the series of committee hearings in the UK Parliament involving heads of the two drug companies. The failed takeover has affected the share price of AztraZeneca more than Pfizer. The company stock price rose sharply prices during the process, beginning the day after the takeover bid was announced (BBC 2014). The uptick would only dramatically decrease in the very day the bid was rejected in May 19. The share price, however, rebounded the day after, paving the way for better and stronger performance as the details of the failed bid became known. The same could not be said in the case of Pfizer. Its share price was tagged at 31.12 before the takeover bid and gradually fell to 28.75 by the end of May as the negotiations drew to a close (Yahoo Finance 2014). The attempted takeover came on the heels of Pfizers intent to merge with AstraZeneca for the purpose of relocating its headquarters to the UK, using it as a tax domicile, avoiding high corporate taxes in the US in the process (Drawbaugh 2014). This trend has been going in recent years for several pharmaceutical companies in the US. This year alone, thirteen tax-inversion deals have been completed, with US drug companies buying foreign counterparts in order to relocate their tax bases abroad (Lorenzetti 2014). Pfizer has made this particular motivation public when it made its bid for AstraZeneca. The corporate tax in the UK is 21% and is expected to fall to 20% in 2015 whereas the US charges corporations 35% (Farell 2014). The UK government was dragged into the issue because the takeover became a matter of public interest, requiring intervention. The takeover came to mean, for the UK polity, a risk for the country because of the prospect of job loss as evidenced in previous merger and acquisition cases. Policy makers, for example, recall the case of Kraft’s Cadbury acquisition. After the takeover, the company failed to honour its promises during the