Pfizer-AstraZeneca Merger Could Face Hurdles With Chinese Antitrust Authorities
Acsilyn Miyazaki | | May 01, 2014 11:02 PM EDT |
(Photo : Reuters)
The acquisition deal between Pfizer and AstraZeneca worth $100 billion could face China antitrust hurdles. China ranks the two multinational pharmaceutical firms in number 1 and 2 spots in the prescription drug industry in the country.
According to sources familiar with the matter, the merger between the two firms could be delayed due to a pending merger clearance from Beijing. The approval is on top of the clearance to be obtained in the US and Europe.
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Cambridge parliament member Julian Huppert said that Beijing was likely to have a hard look at the acquisition deal following a bribery issue involving GlaxoSmithKline last year. AstraZeneca plans to establish a new research institute and headquarters in Cambridge.
Huppert told Reuters during an interview that China could be nervous with the merger deal between two of the country’s biggest suppliers after what happened with GSK.
The monopoly law in China has caused a lot of painful delays for international deals where some people see it as an industrial policy tool.
Global companies have been drawn to China due to its fast growing market. Revenues for drug manufacturers were recorded to be at $82 billion in 2012 and have been expected to reach between $160 billion to $190 billion by the year 2017. This was according to a data shown by IMS Health, adding that China is the second largest drug market behind the US.
Meanwhile, Pfizer would have to sweeten its bid for AstraZeneca after getting two approaches rejected. According to a representative from Pfizer, it would be too soon to speculate about the significance of an impact in a specific location. Recently, Glencore Xstrata experienced the same hurdles in China after it agreed to sell a Peruvian copper mine which needed approval from the country’s Commerce Ministry.
TagsPfizer, AstraZeneca, IMS Health
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