What’s going on with the CSL (ASX:CSL) share price on Friday?

The CSL share price is having a tough end to the week…

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A frustrated male investor frowns with his hands and arms open asking why the share price has dropped today

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The CSL Limited (ASX: CSL) share price is ending the week in the red.

In late afternoon trade, the biotherapeutics company’s shares are down 2.5% to $297.97.

Why is the CSL share price falling?

Today’s decline by the CSL share price appears to be in response to speculation that the company is planning to acquire Swiss-based biotech company Vifor Pharma for ~$10 billion.

Vifor Pharma develops, manufactures and markets pharmaceutical products in iron deficiency, kidney-related and cardio-renal therapies.

Overnight, the Vifor Pharma share price rocketed 21% higher on the Swiss stock exchange in response to the speculation. However, this morning CSL suggested that a deal was far from done.

It commented: “CSL notes the recent speculation about CSL’s involvement in potential offshore M&A activity. CSL regularly assesses strategic opportunities that can improve its business, improve the health of people around the world and provide value to shareholders. There is no certainty that any transaction will result from CSL’s consideration of such opportunities and, if any transaction does result, when such a transaction would occur. CSL will keep the market informed in accordance with its continuous disclosure obligations, and otherwise does not intend to comment on such matters.”

What has the reaction been?

The team at Morgan Stanley has responded to the news. Depending on the funding mix for the potential deal, its analysts estimate that it could be low single digits earnings per share accretive in FY 2022.

However, its analysts have warned that the company would need to find significant cost and revenue synergies to generate a meaningful benefit for shareholders.

As a result, Morgan Stanley has held firm with its equal weight rating and $280.00 price target on the company’s shares.

This lukewarm response could be what is weighing on the CSL share price today. Though, it is worth remembering that this view could change if and when a deal is made and the full terms are understood and modelled.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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