The Spinout Problem Of AstraZeneca plc (ADR)(NYSE:AZN)’s Anti-Infective Division

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It is more than a year AstraZeneca plc (ADR)(NYSE:AZN) is trying to find out a potential investor who can buy a stake in its anti-infective decision. Now, it seems AstraZeneca is coming down to the wire. However, if the deal making process is evaluated, it discloses some big problems that are preventing the company from finalizing a deal.

Lead shareholder

The first major problem seen in the process is AstraZeneca is following a formal process of negotiations where they want to spin off the business and wants to remain the lead shareholder. Based on the basics of the deal and the assets in discussion, the company is finding it tough to make the negotiations work. It is a prime reason sale of anti-infective division is not getting attention of investors. AstraZeneca has also sought out venture companies that had been investing in the same division. Here also, AstraZeneca plc (ADR)(NYSE:AZN) was faced with the similar problem. The assets had almost no differentiation and were late entrants in the market.

Uninteresting assets

One of the experts evaluated AstraZeneca’s proposition and concluded that the problem was with the structure. AstraZeneca plc (ADR)(NYSE:AZN) intended to spin out the entire product pipeline, as well as a 20-person team. AstraZeneca was not ready to compromise on sale of assets. Some were interesting assets which everyone wanted to buy but no one wanted to pay for uninteresting assets included in the pipeline. If it wants high-value assets to play, it has to abandon its all-or-nothing spin out strategy. Cherry picking assets strategy would help it get an interesting deal.

What is in store?

AstraZeneca never announced what it intends to do with anti-infective division. It just said that it was looking for a deal. There is a need for clarity as the restructuring of anti-infective division is a part of top-to-bottom overhaul. It will affect thousands of employees and their jobs with AstraZeneca plc (ADR)(NYSE:AZN).

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