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Share Price: 1,670.00
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UPDATE 2-UK lawmakers plan to probe Pfizer pursuit of AstraZeneca

Wed, 30th Apr 2014 22:29

* Lawmakers want to protect research and jobs in UK

* Planned $100 bln bid would be biggest ever of a UK firm

* Pfizer unable to commit on jobs or investment (Adds FT report on David Cameron's representatives in talks)

By Kylie MacLellan and Ben Hirschler

LONDON, April 30 (Reuters) - British lawmakers intend toinvestigate U.S. drugmaker Pfizer's planned $100 billiontakeover of British rival AstraZeneca in a bid to ensurescientific research and jobs are protected.

Members of the parliamentary business, innovation and skillscommittee are worried that the deal, which would be thebiggest-ever foreign acquisition of a British company, couldthreaten the country's strategic interests.

"We are keen to look closely at it," committee member AnnMcKechin told Reuters.

"We will see how events pan out over the next few days, butclearly given the scale of the proposed merger it is importantthat we consider the impact not just on shareholders but also onemployees and the wider interests of the UK."

AstraZeneca, Britain's second-biggest drugmaker behindGlaxoSmithKline, is an important part of the lifesciences sector and employs nearly 7,000 staff in the country.

The committee's chairman Andrew Bailey said it would belooking to hold an inquiry "pretty quickly", and those called togive evidence were likely to include ministers such as BusinessSecretary Vince Cable and representatives from the Treasury.

The British government has so far adopted a neutral stanceon the matter, with finance minister George Osborne saying anydeal between the two companies would be a commercial matter.

"The line that this is a straightforward commercial issuethat the government has no role in is too laid back," saidBailey. "In AstraZeneca we have a company that amounts to 2.3percent of our total exports, is a world leader in research inpharmaceuticals and is very strategically positioned in thiscountry."

Committee member Katy Clark said Pfizer's management wouldalso probably be among those called to any inquiry.

The Financial Times, citing a senior Whitehall official,reported late on Wednesday that Prime Minister David Cameron hadappointed two of his most senior officials to lead governmentnegotiations with Pfizer on his behalf. (http://link.reuters.com/cuc98v)

Politicians are wary of foreign takeovers in the light ofKraft's 2010 acquisition of Cadbury, when the U.S. foodgroup promised to keep open a key factory, only to go back onthe pledge soon after the deal was completed.

"The committee previously had a great deal of concern overthe Cadbury takeover, so I think this is one we will really haveto closely analyse what is on offer," McKechin said.

Pfizer already has a tarnished reputation in Britain afterit announced plans in 2011 to shut a major drug research site inSandwich, southern England, where Viagra was invented, with theloss of nearly 2,000 jobs.

The U.S. firm says it views Britain as an attractivelocation for both pharmaceutical research and manufacturing -helped by recent government tax incentives - but cannot make anyfirm commitments on future investment or jobs.

Pfizer Chief Executive Ian Read is in Britain to lobbypoliticians and investors about the company's plans. Despite thegovernment's neutral stance, behind the scenes officials arewarning Pfizer against making draconian research job cuts,industry sources said.

Pfizer has made two approaches to AstraZeneca, both of whichhave been rebuffed. The company is widely expected to come backwith a revised offer before a May 26 deadline for it to "put upor shut up" under UK takeover rules. (Additional reporting by William James in London and RichaNaidu in Bangalore, Editing by David Holmes, Susan Fenton andAndrew Hay)

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UK earnings, trading statements calendar - next 7 days

Thursday 25 January 
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Comments and questions to newsroom@alliancenews.com
  
A full 21-day events calendar is provided each day with a subscription to Alliance News UK Professional.
  
Copyright 2024 Alliance News Ltd. All Rights Reserved.

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