AstraZeneca announced it will upgrade its listing in the U. S. while keeping its listings in London and Stockholm, starting in February. The company is moving from the depositary receipt structure to direct shares on the New York Stock Exchange. This decision is significant because U. S. investors are AstraZeneca’s largest shareholder group, and 43% of its revenue comes from the U. S., expected to rise to 50% by 2030.
Some analysts and policymakers expressed relief that AstraZeneca will maintain its London listing, amid concerns it might completely abandon the UK market. The UK government welcomed the decision, stating it demonstrates confidence in the UK economy and supports employment and innovation. However, there are concerns that trading of AstraZeneca shares might shift more toward New York, influencing other large firms in London to consider similar moves.
Charles Hall from Peel Hunt noted that many UK-listed companies have substantial U. S. investor bases and will likely evaluate AstraZeneca’s decision. About 22.5% of AstraZeneca shareholders are in North America, comparable to other large companies like HSBC and Shell. Alasdair Steele warned that if trading volume goes to the U. S., it could impact London’s stock market.
London-listed firms are facing pressure to consider changing their primary listings due to gaps in valuation and performance compared to other markets, such as the S&P 500, which has greatly outperformed the FTSE 100. Mark Kelly, CEO of MKP Advisors, emphasized that AstraZeneca’s size makes it more suited for bigger indices, indicating a struggle for large firms in London’s market.
Some companies, including Wise, have announced plans to shift their listings to New York, while others like Rio Tinto and Glencore have resisted such pressures. Ian Pyle from Aberdeen raised concerns that if AstraZeneca doesn’t see success with its dual listing, it may lead to a complete exit from the UK market.
While AstraZeneca’s commitment to London is seen as positive for now, its chair, Michel Demare, acknowledged the advantages of U. S. markets, which offer greater liquidity and access for investors. Mark Austin, a legal expert, argued that this move should not be viewed negatively for London, as it allows global investors better access to AstraZeneca while retaining its UK connections.
With information from Reuters