Pfizer Speculated to Have GSK in its Sights

Speculation that US pharmaceutical giant Pfizer, after a failed attempt last year to take over AstraZeneca, has its sights on GlaxoSmithKline (GSK) are gaining renewed attention following publication of a note by Deutsche Bank analyst Gregg Gilbert entitled "Introducing PfizerKline."

A merger of Pfizer and GSK would be "materially accretive" for both parties, Gilbert wrote in the note, adding: "Regardless of whether Pfizer decides to split the company into pieces at some point, we believe that the company has a sense of urgency to create value by leveraging the power of its balance sheet to do needle-moving deals."

Deutsche Bank analysts assume a purchase price of around $146 billion, equally divided between stock and cash, along with cost synergies of around $3.7 billion and "a simple blend of tax rates."

An important goal for Pfizer, the bank said, is to "seek a deal that would maximize access to its balance sheet and improve its tax structure."

Another analyst, Andrew Baum, quoted by the news agency Bloomberg, said, however, he doubted that GSK would be a viable acquisition target for Pfizer, as the UK government's interest in preserving the independence of the country's largest drugmaker " is materially higher than it was with AstraZeneca."

Pfizer is continuously searching for new sources of revenue as its drugs come off patent.

Remarks in a Dutch newspaper, by Robert Coury, executive chairman of Mylan, also pick up on the urgent need for the US drugmaker to act. Rather than Israeli generics giant Teva, which has made a hostile takeover bid for Mylan, Coury is quoted as saying Pfizer or Novartis would be a better match.

A cooperation between Netherlands-based Mylan and the American or Swiss drugmaker would make strategic sense and would have significant advantages, Coury added, without being specific.