Friday, June 08, 2007

AstraZeneca - "the winner's curse"

Analysts including Peter Cartwight of Evolution Securities in London said CFO Jon Symonds' departure next month to join Goldman Sachs Group Inc. ``probably will'' affect AstraZeneca's acquisition plans.

In April, AstraZeneca agreed to buy U.S. flu vaccine maker MedImmune Inc. for $15.2 billion, the largest purchase made by Brennan. The acquisition marked a change in strategy, with AstraZeneca taking on debt for the first time for a bid that was 11 times MedImmune's sales.

German drugmaker Merck KGaA paid 5.8 times sales last year in its $13.3 billion purchase of Serono, Europe's largest biotech company.

``One suspects that Symonds was less than happy because it was one hell of a valuation, and it's not clear that he was 100 percent behind that,'' Cartwright said. ``They had the winner's curse: They won the auction and the winner pays the high price.''

More at Bloomberg

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