NEW YORK (AP) -- The board of directors of British drug maker AstraZeneca on Monday rejected the raised $119 billion takeover offer from U.S. drugmaker Pfizer.
AstraZeneca's board said in a statement it "reiterates its confidence in AstraZeneca's ability to deliver on its prospects as an independent, science led business."
Pfizer Inc., the world's second-biggest drugmaker by revenue, has been courting No. 8 AstraZeneca PLC since January, saying their businesses are complementary and would be stronger together. It said Sunday it was ready to raise its stock-and-cash offer by 15 percent to $118.8 billion, or 70.73 billion pounds.
AstraZeneca's board said it believes Pfizer is making "an opportunistic attempt to acquire a transformed AstraZeneca, without reflecting the value of its exciting pipeline."
Should the deal eventually be realized, it would be the richest acquisition ever among drugmakers and the third-biggest deal in any industry, according to figures from research firm Dealogic. It would be Pfizer's fourth deal worth $60 billion or more since 2000.
Pfizer's offer comes amid a surge of other deals as drugmakers look to either grow or eliminate noncore assets to focus on their strengths. Those deals include Switzerland's Novartis AG agreeing to buy GlaxoSmithKline's cancer-drug business for up to $16 billion, to sell most of its vaccines business to GSK for $7.1 billion, plus royalties, and to sell its animal health division to Eli Lilly and Co. of Indianapolis for about $5.4 billion. Canada's Valeant Pharmaceuticals has made an unsolicited offer of nearly $46 billion for Botox maker Allergan, which has turned it down, so far.
Pfizer says its formal proposal "cannot be increased" unless AstraZeneca engages it in discussions before a deadline of 5 p.m. British time on May 26 and recommends a deal.
Pfizer also increased the ratio of cash AstraZeneca shareholders would receive, from 33 percent to 45 percent. The latest offer would give them the equivalent of 55 pounds for each AstraZeneca share, split between 1.747 shares of the new company and 2.476 pence in cash.
Pfizer said in a statement that it won't make a hostile offer directly to AstraZeneca's stockholders and will only proceed if the company's board recommends accepting the deal. It said the offer represents a 45 percent premium to AstraZeneca's share price of 37.82 pounds on April 17, before rumors of the deal began circulating.
Pfizer CEO Ian Read said in a statement that the "combination is in the best interests of all stakeholders. We are excited at the opportunity to create a scientific powerhouse, delivering great benefits to patients and science in the UK and across the globe."
Read noted that after speaking with AstraZeneca officials earlier Sunday, he didn't think its board was "prepared to recommend a deal at a reasonable price." Pfizer said it hopes AstraZeneca's shareholders will push for the deal.
AstraZeneca has repeatedly rejected Pfizer's offers, insisting they significantly undervalue the company and its portfolio of experimental drugs. The company and British government officials also have raised concerns about the prospect of job cuts, facility closures and losing some of the science leadership in the UK, where London-based AstraZeneca is the second-biggest drugmaker, behind GlaxoSmithKline PLC.
Pfizer has made assurances such cuts would be limited. It's promised to complete AstraZeneca's research and development hub in Cambridge. And it pledged to establish the new company's tax residence, but not headquarters, in England, which would significantly reduce its future tax rate.
But layoffs are inevitable in big mergers, and Pfizer has a track record of eliminating tens of thousands of jobs around the world as a result of megadeals.
While Pfizer is best known to the public for Viagra, cholesterol fighter Lipitor and other widely used medicines, in the pharmaceutical industry it's known for two other things: marketing muscle and mega mergers, which together have repeatedly propelled it to the top.
Since 2000, it's done three acquisitions that have vaulted the company to No. 1 in revenue. It paid $111.8 billion for Warner-Lambert Co. in 2000 to get the rights to Lipitor, then $59.8 billion for Pharmacia Corp. in 2003 and $68 billion for Wyeth in 2009, according to Dealogic. With this deal, Pfizer would then be the buyer in four of the 10 richest deals ever in the pharmaceutical industry.
Each of those deals resulted in massive layoffs and closures of some medicine factories, research facilities and office buildings, with the cost-cutting boosting Pfizer's bottom line for a few years. That's clearly a key part of the rationale for this proposal, along with the prospect of lower taxes and getting some promising experimental drugs from AstraZeneca's labs.
Pfizer also wants to add to its medicine portfolio to boost revenue. The company slipped from No. 1 to No. 2 last year, behind Novartis AG, mainly because Lipitor got generic competition at the end of 2011, wiping out several billion dollars in annual sales. Pfizer also has sold off a couple parts of its business and reorganized as part of preparations to possibly break off another part of the company, something analysts have been urging it to do.
Follow Linda A. Johnson at www.twitter.com/LindaJ_onPharma