Call for investigation into Pfizer's proposed takeover of AstraZeneca
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Version 0 of 1. Powerful MPs are preparing to demand an investigation into Pfizer's proposed £60bn takeover of AstraZeneca in an attempt to protect the UK's place at the heart of global scientific research. Adrian Bailey, chairman of the business select committee, called for an early investigation into the potential takeover, which he said "could threaten the UK's strategic interests". Bailey said Pfizer's bosses should be interrogated at the earliest possible opportunity so that the UK's interests could be defended before it was too late, the takeover of Cadbury's by Kraftavoiding a situation like Kraft's takeover of Cadbury in 2010. That deal led to hundreds of British job losses and the closure of iCadbury's Somerdale plant near Bristol, despite a promise that it would be a "net beneficiary in terms of jobs". Bailey said Pfizer's chief executive, Ian Read, needed to be grilled on his company's commitment to the UK after its decision in 2011 to shut down its world famous research facilities in Sandwich, Kent, with the loss of more than 1,500 jobs. "Pfizer shut down Sandwich facilities just three years ago; now they are saying they will invest in [research] here because they say Britain's superior taxes encourage investment," Bailey said. "There really has to be a public interest test in this takeover. When you think of the strategic influence of pharmaceuticals in the UK economy and the position of the UK in the global race, the stakes could not be higher." The potential takeover – which would be the biggest foreign takeover of a British firm – has drawn warnings from trade unions and scientists of cuts to jobs and scientific research. AstraZeneca is a cornerstone of the government's drive to rebalance the economy, accounting for 2.3% of the country's goods exports and employing more than 7,000 staff in the UK. Bailey said it was "reprehensible" of George Osborne, the chancellor, to refuse to publicly debate the potential threats and refer to any deal as no more than "a commercial matter between the companies". In the wake of the sale of Cadbury, the government promised to take "a greater interest" in mergers and acquisitions involving UK companies following the Kay Review into how to combat short-termism in the markets. A review by Prof John Kay, ordered by Vince Cable, suggested discouraging acquisitions that would threaten a firm's operations in the UK. The government did not introduce legislation to protect against foreign takeovers but pledged to "engage with companies and their investors … to promote investment which benefits the UK economy". Osborne spoke on Tuesday to AstraZeneca's chief executive, Pascal Soriot and said he would meet Read, the Scottish-born Pfizer boss. Osborne said on Tuesday night: "I want to see more British science. AstraZeneca have been doing a lot of that great science. Pfizer said very encouraging things about the UK as a place to do business and a place to do good science. "What matters to me is that we have great science in Britain, that we are developing great medicines in Britain, and that we have great jobs in Britain. I will support anything that delivers those things." Read, who flew into the UK on Tuesday ahead of his meeting with ministers, warned the government not to block the proposed takeover. "The UK faces a choice," Read told the Financial Times. "Do they focus on ensuring there is an educated workforce with the right incentives in place to attract investment or do they pick winners and losers." Pfizer is keen to buy AstraZeneca so that it can be registered in the UK for tax purposes, thus avoiding the US's 38% corporate tax rate in favour of the UK's 21%. It would also benefit from special tax breaks Osborne has introduced to encourage scientific research in the UK. |