Whatâs Going On Here?AstraZeneca might not want to operate heavy-machinery for 24 hours: the UK drugmaker agreed to buy US biotech company Alexion for a dizzying $39 billion over the weekend, in one of this year's biggest mergers. What Does This Mean?AstraZeneca hit the headlines not long ago for developing an effective coronavirus vaccine alongside the University of Oxford. But like all of us, itâs looking forward to not having to think about the pandemic every day, and its merger with Alexion will give it an excuse to shift its focus onto something else entirely: rare diseases.
Both companies seem to have been hunting for a deal for a while now. Alexion, for its part, has been under pressure to find a buyer from an activist investor whoâs been pushing for a change in company strategy. AstraZeneca, meanwhile, has reportedly been determined to take advantage of a soaring share price by using its shares to pay for new acquisitions. Why Should I Care?For markets: Odd couple.
AstraZenecaâs shares fell 6% on the news, which is more common than youâd think. A buyerâs share price often falls after an acquisition announcement, with investors worried either that itâs paying too much for the deal or that itâll struggle to successfully integrate the new business with its own. The latter seems to be their biggest concern in this particular case: itâs not like thereâs a lot of overlap between the two companiesâ products, after all.
The bigger picture: No more playing games.
Dealmakingâs having a bit of a moment, with last quarter smashing records and this one on track to do it all over again. And itâs not slowing down just because itâs almost Christmas: social media firm Reddit bought TikTok-rival Dubsmash on Monday in a bid to keep up with the surge in popularity of video-sharing, while video game giant Electronic Arts announced itâd be buying rival studio Codemasters in a deal worth $1.2 billion. | 