AstraZeneca’s CEO, Pascal Soriot, has expressed his desire to relocate the company’s stock market listing from the UK to the US, potentially dealing a significant blow to the London Stock Exchange. The move to New York has been contemplated by Soriot, who has also considered shifting the company’s domicile. The news of this potential shift caused AstraZeneca’s share price to rise by 2.8% following its publication.
Such a move by AstraZeneca would be part of a trend that has seen several companies leaving the UK stock market in search of higher valuations. Notable departures from the FTSE 100 in recent years include Ashtead, Flutter Entertainment, CRH, and Smurfit Westrock. The potential relocation of AstraZeneca’s listing would likely face opposition from the UK government, although it lacks the formal power to block such a move.
The pharmaceutical giant’s discussions with the government revolve around rebates owed to the NHS for new medicines, a topic that has caused tensions, particularly concerning AstraZeneca’s breast cancer drug Enhertu. The company’s decision to withdraw from a vaccine production project in Liverpool earlier this year further strained relations with the government.
Under Soriot’s leadership, AstraZeneca’s market value has more than tripled since 2012, surpassing industry stalwarts like Shell and HSBC. The CEO’s emphasis on growth in the US market aligns with the company’s ambitions, with plans to expand significantly in the region in the coming years. Soriot’s compensation has mirrored the company’s success, making him the highest-paid CEO in the FTSE 100 for consecutive years.
The potential move to the US reflects the allure of the American pharmaceutical market, known for its high spending on medicines despite lower life expectancies compared to other countries. UK executives have often lamented the undervaluation of British companies compared to their US counterparts, highlighting the appeal of listing in the US for AstraZeneca.
Experts note that if AstraZeneca were to shift its listing to the US, it would not only impact London but also have broader implications for the pharmaceutical industry and corporate governance. The move would underscore the ongoing trend of companies seeking more favorable valuations and growth opportunities in international markets.
In conclusion, AstraZeneca’s potential relocation of its stock market listing to the US signifies a strategic shift that could reshape the company’s global positioning and impact the dynamics of the UK and US pharmaceutical markets. The decision, if realized, would mark a significant milestone in AstraZeneca’s trajectory and could set a precedent for other UK-based companies considering similar moves.
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