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Rumours of renewed interest surrounding a potential bid by AstraZeneca to purchase Shire caused the latter's stock price to increase by nearly as much as 2.5 percent on Wednesday. AstraZeneca CEO Pascal Soriot's decision to suspend share buybacks last year was viewed by some as an indication that the drugmaker was preparing to acquire other companies.
According to Credit Suisse, AstraZeneca needs to add over $6 billion in annual sales by 2016 to turn a projected 4 percent decline in revenue into 2 percent revenue growth. On a sales multiple of 3.5, the drugmaker would need to spend more than $20 billion in acquisitions, Credit Suisse noted. Currently, Shire has a market capitalisation of about $18 billion and annual sales of nearly $5 billion.
AstraZeneca refused to comment on the takeover speculation.
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