Pharmaceutical giant Pfizer Inc. has abandoned its effort to buy British rival AstraZeneca for $117 billion in what would have been the biggest deal ever in the drug industry.
The offer represented "full value" for AstraZeneca, the New York drug maker said in a statement Monday. AstraZeneca said it welcomed "the opportunity to continue building on the momentum we have already demonstrated."
Under British takeover rules, Pfizer had until Monday to make a firm offer. The regulations require a cooling-off period of at least three months before talks can restart, giving both drug makers time to figure out their next move. U.S. and British stock markets were closed Monday for holidays.
Pfizer is hoping that AstraZeneca investors will pressure the company's board to come back to the table, while AstraZeneca may seek a revenue-generating acquisition of its own to help it fend off the larger company.
"The probability of a future AstraZeneca acquisition is dimmed, but not entirely extinguished," said Mark Purcell, an industry analyst with Barclays, in a note to clients.
Pfizer, the biggest U.S. drug maker, has declined to say if it will try again to buy London-based AstraZeneca after the company's board rejected its last offer. For talks to begin anew after three months, AstraZeneca must invite the discussion. Otherwise, Pfizer needs to wait six months to make a new bid.
"We continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us," Pfizer Chief Executive Officer Ian Read said in the statement. "As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy."
AstraZeneca Chairman Leif Johansson was upbeat. "We welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company," he said in a statement after Pfizer's announcement.