Investors pushed up the shares in the target, ResApp, by 25 per cent after the announcement, in line with the offer price.

ResApp said it had entered into a binding scheme implementation deed for 11.5 cents a share, a 12 per cent premium to Friday’s close of 9 cents a share.

The takeover is still subject to the recommendations of an independent expert, regulatory and shareholder approvals.

It is also subject to exclusivity agreements and a $1 million break fee on both sides.

ResApp managing director Tony Keating said the company was excited by the prospect of being bought by Pfizer which he said shared his company’s vision and belief that technology could help transform lives.

“The proposed acquisition recognises the years of dedicated work by the ResApp team to build (it) into a leader in audio based analysis of respiratory health,” Keating said.

“We believe that the material premium and certainty of an all-cash consideration is an attractive outcome for shareholders.”

ResApp is currently trialling a smartphone app that can diagnose Covid-19 through people coughing into the phone’s microphone.

The testing has already shown that the technology is more effective than the more widely used rapid antigen tests and would significantly reduce costs.

Pfizer’s chief digital and technology officer Lidia Fonesca said the proposed acquisition would add to her company’s growing digital capabilities and “bolster our efforts to pave a new era for digital health”.

A shareholder vote has been scheduled for mid June.