Astrazeneca shares slump on £29bn US deal: FTSE 100 firm will need £13bn bridging loan to finance blockbuster takeover of Alexion Pharmaceuticals

astrazeneca

Astrazeneca shares fell 5.2 per cent in early trading today as the pharmaceuticals giant revealed it will take out a £13billion bridging loan to finance its blockbuster takeover of Alexion Pharmaceuticals. 

The FTSE 100 company, which developed a coronavirus vaccine with Oxford University, has signed a £29billion cash-and-shares deal to buy the Boston-based rare diseases specialist. 

It has decided to take out the $17.5billion (£13billion) loan to finance the deal, which is the largest acquisition in its 21-year history, and roll over Alexion’s debt.

The transaction, announced on Saturday, follows speculation that chief executive Pascal Soriot was looking for a large target to take advantage of its soaring share price, which has jumped from around 3,800p to £77.33 in just four years.  

Shares have now lost around 17 per cent since hitting a peak in July, as rivals Pfizer and Moderna moved ahead in the race to get Covid-19 vaccines online. 

The purchase will add up to a substantial additional dilution of shares next year and help AstraZeneca diversify from its fast-growing cancer business. 

Astra will refinance with medium-term bank loans, bonds and cash from trading. 

Alexion’s investors will receive £45 cash and 2.1 Astra shares for each Alexion share – or £132 per share, a 45 per cent premium – handing them 15 percent of the combined company. 

The new business will gain £378million of annual efficiencies through the sharing of resources and expertise, following £491million of investment in the three years after acquisition.

Source: https://www.thisismoney.co.uk/money/markets/article-9048997/Astrazeneca-takes-13bn-loan-fund-Alexion-deal.html

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