Pfizer said Sunday it was raising its takeover offer to 55 pounds a share, or 69 billion pounds ($118 billion, 86 billion euros) in total, of which 45 percent would be in cash and the balance in shares. Pfizer said it would walk away if AstraZeneca rejected the latest offer. On Monday, just nine hours later, AstraZeneca said no.

A merged Pfizer-AstaZeneca would have had its headquarters in New York, but its tax base in Britain, where corporate tax rates are lower than in the United States.

Pfizer's proposed takeover of AstraZeneca would be the largest-ever foreign acquisition of a British company. Many British scientists and politicians worry it would undermine Britain's science base. At a parliamentary hearing in Britain last week, Pfizer CEO Ian Read admitted that job cuts and cuts in R&D spending would occur ‘somewhere' after a merger.

Opposition to the proposed deal has also been strong in Sweden, where AstraZeneca has half its roots. The Swedish government launched a concerted effort on Friday against a merger it worries would lead to cuts in science jobs and research. There has also been opposition to the merger in US states where AstraZeneca has a big presence.

What's really behind it?

AstraZeneca Chairman Leif had questioned the logic behind Pfizer's move.

"Pfizer's approach throughout its pursuit of AstraZeneca appears to have been fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimization," Johansson said. "From our first meeting in January to our latest discussion yesterday, and in the numerous phone calls in between, Pfizer has failed to make a compelling strategic, business or value case."

AstraZeneca has laid out details of its pipeline of new drugs, and argued it has no need for a deal.

js/hg (Reuters, AFP)