Bloomberg News

Pfizer, AstraZeneca to Testify as London Mayor Warns on Bid (2)

May 06, 2014

U.K. lawmakers decided to call executives from Pfizer Inc. (PFE:US) to testify on the proposed takeover of AstraZeneca Plc (AZN), as London Mayor Boris Johnson added his voice to those urging caution on the deal.

Representatives of London-based AstraZeneca will also be asked to appear before the House of Commons Business Committee, the panel said in an e-mailed statement after meeting in London today. Business SecretaryVince Cable, answering lawmakers’ concerns in the House of Commons today, said the government is approaching the Pfizer bid from a position of neutrality.

Lawmakers from across Britain’s political parties have raised questions about the offer of more than $100 billion and are pressing for assurances that New York-based Pfizer honors its pledge, made in a letter to Prime Minister David Cameron last week, that it will protect jobs and investment in pharmaceutical research and development in the U.K.

“It would be very important to establish that Pfizer is genuinely committed to R&D in this country,” Johnson, a member of Cameron’s Conservative Party, told LBC Radio today. “I believe in principle that we should have an open system of markets in this country, but when I look at something like AstraZeneca and I look at an organization of that scale, of its relative importance to the U.K. economy, the sheer percentage of its money that goes into R&D, I think it is of great importance to Britain.”

Union Demand

Labor unions Unite and the GMB asked for a meeting with Cable, a member of Cameron’s Liberal Democrat coalition partners, to urge him to impose a “national interest” test on the deal. They accused Cameron and Tory Chancellor of the Exchequer George Osborne of being supportive of the Pfizer bid while AstraZeneca workers have not been consulted.

“AstraZeneca is a key player in the U.K.’s advanced manufacturing sector and as such is strategically important to the U.K., yet David Cameron and George Osborne seem comfortable waving the deal through, leaving any manufacturing strategy in tatters,” Unite Assistant General Secretary Tony Burke said in an e-mailed statement. “The workforce and the unions have acted in a responsible manner and shown remarkable patience, but that is now wearing thin.”

Cable, who said he would be happy to meet with the unions, insisted the government is “working hard within the constraints we have” to secure a positive outcome for British jobs and science. He said European Union rules restrict the amount that government can intervene and British law only allows intervention on issues of national security, media plurality and banking.

‘Even-Handed Neutrality’

“The government must and will approach this from a position of even-handed neutrality,” Cable said in Parliament. “I’m not ruling out intervention, we have to look at all the options open to us.”

Cameron’s spokesman, Jean-Christophe Gray, defended the prime minister’s involvement and repeated the government’s view that the final decision should rest with the companies’ shareholders.

“The government’s position is one of active engagement with both companies in terms of assessing the link to jobs and skills,” Gray told reporters in London today. “The sole basis on which the government is engaging is with regard to underlining the importance we attach to continuing to expand the life-science sector in the U.K.”

AstraZeneca Defense

AstraZeneca, which last week rejected Pfizer’s 62.6 billion-pound ($106 billion) bid, said today that its plan for growth is working and it is aiming for annual revenues of more than $45 billion by 2023. The company highlighted drugs it has developed, including Brilinta and Farxiga, which it said will be the drivers of growth.

“The increasingly visible success of our independent strategy highlights the future prospects for our shareholders,” Chairman Leif Johansson said in a statement. “These are benefits that should fully accrue to AstraZeneca’s shareholders.”

Cable praised AstraZeneca’s plans and the company’s investment in research and development of new drugs.

“AstraZeneca do have an ambitious and attractive long-term investment plan which we encouraged as part of the industrial strategy,” he said. “We want to see it fulfilled.”

Science Minister David Willetts will also testify to the House of Commons Science and Technology Committee about the government’s involvement in the deal.

To contact the reporters on this story: Thomas Penny in London at tpenny@bloomberg.net; Robert Hutton in London at rhutton1@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Andrew Atkinson


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Companies Mentioned

  • PFE
    (Pfizer Inc)
    • $29.36 USD
    • -0.03
    • -0.1%
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