LONDON (Reuters) - MPs intend to investigate U.S. drugmaker Pfizer’s planned $100 billion (59.21 billion pounds) takeover of British rival AstraZeneca in a bid to ensure scientific research and jobs are protected.
Members of the parliamentary business, innovation and skills committee are worried that the deal, which would be the biggest-ever foreign acquisition of a British company, could threaten the country’s strategic interests.
“We are keen to look closely at it,” committee member Ann McKechin told Reuters.
“We will see how events pan out over the next few days, but clearly given the scale of the proposed merger it is important that we consider the impact not just on shareholders but also on employees and the wider interests of the UK.”
AstraZeneca, Britain’s second-biggest drugmaker behind GlaxoSmithKline, is an important part of the life sciences sector and employs nearly 7,000 staff in the country.
The committee’s chairman Andrew Bailey said it would be looking to hold an inquiry “pretty quickly”, and those called to give evidence were likely to include ministers such as Business Secretary Vince Cable and representatives from the Treasury.
The British government has so far adopted a neutral stance on the matter, with chancellor of the exchequer George Osborne saying any deal between the two companies would be a commercial matter.
“The line that this is a straightforward commercial issue that the government has no role in is too laid back,” said Bailey. “In AstraZeneca we have a company that amounts to 2.3 percent of our total exports, is a world leader in research in pharmaceuticals and is very strategically positioned in this country.”
Committee member Katy Clark said Pfizer’s management would also probably be among those called to any inquiry.
Politicians are wary of foreign takeovers in the light of Kraft’s 2010 acquisition of Cadbury, when the U.S. food group promised to keep open a key factory, only to go back on the pledge soon after the deal was completed.
“The committee previously had a great deal of concern over the Cadbury takeover, so I think this is one we will really have to closely analyse what is on offer,” McKechin said.
Pfizer already has a tarnished reputation in Britain after it announced plans in 2011 to shut a major drug research site in Sandwich, southern England, where Viagra was invented, with the loss of nearly 2,000 jobs.
The U.S. firm says it views Britain as an attractive location for both pharmaceutical research and manufacturing - helped by recent government tax incentives - but cannot make any firm commitments on future investment or jobs.
Pfizer Chief Executive Ian Read is in Britain to lobby politicians and investors about the company’s plans. Despite the government’s neutral stance, behind the scenes officials are warning Pfizer against making draconian research job cuts, industry sources said. [ID:nL6N0NL6UO]
Pfizer has made two approaches to AstraZeneca, both of which have been rebuffed. The company is widely expected to come back with a revised offer before a May 26 deadline for it to “put up or shut up” under UK takeover rules.
Additional reporting by William James, Editing by David Holmes and Susan Fenton