AstraZeneca plc (ADR)(NYSE:AZN) based in Britain has refused to accept the offer made by Pfizer for a takeover, where it offered 55 pounds a share making it around 70 billion pounds in total. The refusal of this final offer from Pfizer has raised doubts on the plans by this U.S. drug maker for a merger that would lead to the creation of a biggest pharmaceutical group in the world.

Pfizer Inc. (NYSE:PFE) made an official announcement on Sunday about its final offer to AstraZeneca for the merger worth $118 billion in total saying if it is turned down by AstraZeneca this time then Pfizer will walk away. Nine hours later AstraZeneca turned it down.

Benefits to Pfizer

Pfizer with this merger was looking forward to the creation of a drug company that is largest in the world and has headquarters in New York with tax base located in Britain, where the rates of corporate tax are lower than what they are in the United States. Not only AstraZeneca plc (ADR)(NYSE:AZN) but many politicians and scientists are also in opposition to this proposal from Pfizer as this could lead to job cuts and reduced research.

“Pfizer’s chances are going down despite its offer of a higher price,” told Erik Gordon, professor at the University of Michigan’s Ross School of Business, to Reuters. “The deal looks less likely today than it looked 10 days ago.”

What made AstraZeneca turn down the proposal

Pfizer Inc. (NYSE:PFE) had made an offer of 53.50 pounds on Friday and Chairman of AstraZeneca plc (ADR)(NYSE:AZN) Leif Johansson had clearly informed Pfizer in a discussion that a bid either equal to or higher than 58.85 pounds will get recommendation from his board. Not only was he dismayed by the price offered, he also expressed anger over the lack of industrial logic behind the move by Pfizer. He said that the controversial tax plans may pose certain risks to the shareholders. Not only that, it could even pose a threat to jobs in the field of Life Science in Sweden, Britain and the United States.

“Pfizer’s approach throughout its pursuit of AstraZeneca appears to have been fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimization,” Johansson said.

Once the prospects of Astrazeneca’s takeover by Pfizer Inc.(NYSE:PFE) ebbed away, the impact showed in the form of a downward tumbling of 13% in Brit firms share price to 42 pounds in early trade.