Pfizer, a U.S. company, decided to acquire AstraZeneca by 2014 through a friendly proposal, but the board of AstraZeneca resisted over the price set by Pfizer and due to strategic concerns. Would it be better for the pharmaceutical consumers? Pfizer encountered various challenges in increasing sales like other players of the industry due to the increasing development of new drugs.
Pfizer tackled this challenge, over the last decade or more, through acquisitions as a way to acquire new drugs, increase sales, and to reduce costs through combining operations and cutting staff. This acquisition of a U.K. company, AstraZeneca, by a U.S. company, Pfizer, would ultimately reduce the corporate taxes for Pfizer.
However, AstraZeneca board believed that in recent years, it has joined the route of development of new drugs, which is enough for the company’s growth. This acquisition might cause disruption for the company in launching new drugs to the market, as the CEO realized, and would also halt the company’s increasing innovation processes.
Along with AstraZeneca concern, cutting staff through this acquisition would ultimately cause the impact on the country’s economy, which raised the concern of various U.K. politicians. The case asked students to determine the important stakeholders to consider during this acquisition and which of the stakeholders, including employees, shareholders, drug consumers, would have the ultimate advantage of this potential acquisition.
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