Sign in Subscribe
Drugs

AstraZeneca: A New Pharmaceutical Giant Formed

Strategic Insights

— 1 min read

AstraZeneca, the combined entity resulting from the merger of Britain's Zeneca and Sweden's Astra, is set to become the world's third-largest pharmaceutical company. The new group will have to make significant payments to American pharmaceutical giant Merck, amounting to $1.7 billion, for rights to Astra's new medicines. This deal is part of a larger agreement that will see Zeneca pay $4.7 billion to Merck in 2008, further cementing AstraZeneca's position in the global pharmaceutical market.

Key Takeaways:

  • AstraZeneca will pay $1.7 billion to Merck for rights to Astra's new medicines, with a further $4.7 billion payment due in 2008.
  • The new group will have annual sales of approximately £9.6 billion, with £7 billion from pharmaceuticals and annual pre-tax profits of over £2 billion.
  • The merged company will have a capitalisation of over £45 billion, making it the third-largest pharmaceutical company in the world.
  • AstraZeneca expects to make annual savings of $1.1 billion, leading to the loss of 6,000 jobs, approximately 10% of the combined total.
  • The company will have a one-off charge of $1.2 billion and will be chaired by Percy Barnevik, the leading Swedish industrialist.
  • Zeneca shareholders will own 53.5% of the new group, with Astra shareholders owning the remaining 46.5%.
  • AstraZeneca will have its headquarters in London, with research and development headquarters in Sweden, and "centres of excellence" in the UK and the US.

Statistics:

  • $1.7 billion: The amount AstraZeneca will pay to Merck for rights to Astra's new medicines.
  • $4.7 billion: The amount Zeneca will pay to Merck in 2008, further compensating for rights to Astra's new medicines.
  • £9.6 billion: The estimated annual sales of AstraZeneca, with £7 billion coming from pharmaceuticals.
  • £2 billion: The estimated annual pre-tax profits of AstraZeneca.
  • £45 billion: The estimated capitalisation of AstraZeneca, making it the third-largest pharmaceutical company in the world.
  • 1,000 jobs: The estimated number of jobs to be lost in the UK due to the merger.
  • 6,000 jobs: The estimated total number of jobs to be lost due to the merger, approximately 10% of the combined total.
  • $1.1 billion: The estimated annual savings of AstraZeneca, leading to job losses.
  • $1.2 billion: The one-off charge associated with the merger.

Sources:

  • The Times, 1998

Read more