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Labour threatens to block AstraZeneca takeover bid if it wins 2015 election Labour threatens to block AstraZeneca takeover bid if it wins 2015 election
(about 2 hours later)
Labour's shadow business secretary, Chuka Umunna, has threatened to block the proposed £63bn takeover of AstraZeneca by its US rival Pfizer if the party wins the general election.Labour's shadow business secretary, Chuka Umunna, has threatened to block the proposed £63bn takeover of AstraZeneca by its US rival Pfizer if the party wins the general election.
Umunna said that if Labour came to power in May 2015 he would subject a deal to a public interest test and block the transaction if the result was negative.Umunna said that if Labour came to power in May 2015 he would subject a deal to a public interest test and block the transaction if the result was negative.
Analysts and lawyers said the timeframe of a takeover supported Labour's threat, because a deal could take more than a year to clear regulatory hurdles as it would need to be vetted in Europe, the US and China, where Pfizer is the largest drugmaker and AstraZeneca the second-largest. Analysts and lawyers said the timeframe of a takeover supported Labour's threat, as a deal could take more than a year to clear regulatory hurdles in Europe, the US and China, where Pfizer is the largest drugmaker and AstraZeneca the second-largest.
Umunna said Labour would amend the criteria for a public interest test on sensitive takeovers to include the impact on Britain's science and research and development base.Umunna said Labour would amend the criteria for a public interest test on sensitive takeovers to include the impact on Britain's science and research and development base.
The deal would be blocked if a panel composed of scientists and business people warned that it would have an adverse effect, said Umunna. The deal would be blocked if a panel composed of scientists and business people warned that it would have an adverse effect, said Umunna. "If they advise that it could be adverse then I as secretary of state, if I was in a position to do so, and the legal advice of the department is such that we could do so, and the transaction had not taken place, I would intervene to block it on those grounds."
"If they advise that it could be adverse than I as secretary of state, if I was in a position to do so, and the legal advice of the department is such that we could do so, and the transaction had not taken place, I would intervene to block it on those grounds."
Speaking in an interview with Bloomberg TV, Umunna said he was not against foreign takeovers. "We are very much open for business but we could be open without saying yes to every single merger regardless of the impact on the economy." Umunna added, however, that the UK had one of the most permissive takeover regimes in the western world.Speaking in an interview with Bloomberg TV, Umunna said he was not against foreign takeovers. "We are very much open for business but we could be open without saying yes to every single merger regardless of the impact on the economy." Umunna added, however, that the UK had one of the most permissive takeover regimes in the western world.
AstraZeneca has refused to negotiate with Pfizer, which made a £63bn approach two weeks ago and is preparing to come back with a higher offer that could value the Anglo-Swedish company at up to £67bn. AstraZeneca has refused to negotiate with Pfizer, which made a £63bn approach two weeks ago and is preparing to come back with a higher offer that could value the Anglo-Swedish firm at up to £67bn.
John Milligan, a competition partner at Clyde & Co, said delays could mean a deal would not be closed before 7 May next year. "If the European commission had serious concerns as to the deal's compatibility with the common market – which it may well do given its size – it could take a minimum of six months and more likely quite a bit longer, potentially 12 months or more, if commitments were required to secure clearance." John Milligan, a competition partner at Clyde & Co, said delays could mean a deal would not be closed before the election in May next year. "If the European commission had serious concerns as to the deal's compatibility with the common market – which it may well do given its size – it could take a minimum of six months and more likely quite a bit longer, potentially 12 months or more, if commitments were required to secure clearance."
He added: "China and US would similarly take many months. One would expect the EU, US and Chinese authorities to consult with one another on their merger respective investigations."He added: "China and US would similarly take many months. One would expect the EU, US and Chinese authorities to consult with one another on their merger respective investigations."
Labour would have to legislate to expand the public interest test's categories to include science and research, but Milligan said this would take no more than two months. Labour would have to legislate to expand the public interest test's categories to include research, but Milligan said this would take no more than two months.
Meanwhile, AstraZeneca's top scientist, Menelas Pangalos, warned that the takeover would jeopardise important relationships with UK universities and research organisations.Meanwhile, AstraZeneca's top scientist, Menelas Pangalos, warned that the takeover would jeopardise important relationships with UK universities and research organisations.
As AstraZeneca took members of the British media on a tour of the site of its future campus in Cambridge, where it plans to move by 2016, Pangalos, who heads the company's innovative medicines unit and used to work at Pfizer, said AstraZeneca was an "integral part of the UK academic community" through research collaborations and funding of postdoctorates, student sponsorships and internships.As AstraZeneca took members of the British media on a tour of the site of its future campus in Cambridge, where it plans to move by 2016, Pangalos, who heads the company's innovative medicines unit and used to work at Pfizer, said AstraZeneca was an "integral part of the UK academic community" through research collaborations and funding of postdoctorates, student sponsorships and internships.
"You can't just build that overnight. This takes years of building … it's also quite fragile, and it's all down to people. If you turn that on its head it will have a huge detrimental impact on science in the UK.""You can't just build that overnight. This takes years of building … it's also quite fragile, and it's all down to people. If you turn that on its head it will have a huge detrimental impact on science in the UK."
AstraZeneca has just launched a joint research fund worth £9m with the Medical Research Council's Laboratory of Molecular Biology (LMB), adjacent to AstraZeneca's planned £330m campus in Cambridge, which is still a grassy field at this stage.AstraZeneca has just launched a joint research fund worth £9m with the Medical Research Council's Laboratory of Molecular Biology (LMB), adjacent to AstraZeneca's planned £330m campus in Cambridge, which is still a grassy field at this stage.
Sir Hugh Pelham, the director of the LMB, said the collaboration would enable scientists from LMB and AstraZeneca "to do things they wouldn't otherwise do". Pangalos described it as "blue sky research". Sir Hugh Pelham, director of the LMB, said the collaboration would enable scientists from LMB and AstraZeneca "to do things they wouldn't otherwise do". Pangalos described it as "blue sky research".
He highlighted the advantages of being next door to AstraZeneca, so scientists can go back and forth between their labs, and decisions can be made locally.He highlighted the advantages of being next door to AstraZeneca, so scientists can go back and forth between their labs, and decisions can be made locally.
Pelham echoed Pangalos's concerns about the potential effect of a Pfizer takeover, saying it "could be disruptive" with AstraZeneca in the middle of its move. "This can't help." But he added pragmatically: "Whoever is next door to us we will talk to." Pelham echoed Pangalos's concerns about the effect of a Pfizer takeover, saying it "could be disruptive" with AstraZeneca in the middle of its move. "This can't help." But he added pragmatically: "Whoever is next door to us we will talk to."
Pfizer's president of research and development, Mikael Dolsten, went on a charm offensive in Cambridge's science community on Thursday and met the LMB.Pfizer's president of research and development, Mikael Dolsten, went on a charm offensive in Cambridge's science community on Thursday and met the LMB.
Pfizer received a boost on Friday when it submitted a new drug application earlier than expected in the US for a breast cancer treatment, one of its key cancer drugs that has received a breakthrough designation.Pfizer received a boost on Friday when it submitted a new drug application earlier than expected in the US for a breast cancer treatment, one of its key cancer drugs that has received a breakthrough designation.
Scientists working in AstraZeneca's existing MedImmune lab in Cambridge, a 10-minute drive from the planned campus, said reassurances from the chief executive, Pascal Soriot, "help remove the worry" about a potential takeover – and they are just getting on with their work. Scientists working in AstraZeneca's existing MedImmune lab in Cambridge said reassurances from the chief executive, Pascal Soriot, "help remove the worry" about a potential takeover – and they are just getting on with their work.
The 13-acre site to the south of Cambridge, where AstraZeneca plans to build a research centre and headquarters housing 2,000 employees, is within walking distance of LMB, hospitals, the Cancer Research UK Cambridge Institute and the Wellcome Trust-MRC Institute of Metabolic Science. AstraZeneca'sThe 13-acre site to the south of Cambridge, where AstraZeneca plans to build a research centre and headquarters housing 2,000 employees, is within walking distance of LMB, hospitals, the Cancer Research UK Cambridge Institute and the Wellcome Trust-MRC Institute of Metabolic Science.
Stepping up the pressure on AstraZeneca's shareholders to reject an offer from Pfizer, Swedish government ministers reiterated their worries about "Pfizer's semi-hostile takeover" proposal.Stepping up the pressure on AstraZeneca's shareholders to reject an offer from Pfizer, Swedish government ministers reiterated their worries about "Pfizer's semi-hostile takeover" proposal.
Writing in the Wall Street Journal, the ministers for finance, Anders Borg, enterprise, Annie Lööf, and education and research, Jan Björklund, warned: "The net increase in Pfizer's workforce has only been roughly 25,000 since 1999, meaning that nearly 100,000 employees have lost their jobs."Writing in the Wall Street Journal, the ministers for finance, Anders Borg, enterprise, Annie Lööf, and education and research, Jan Björklund, warned: "The net increase in Pfizer's workforce has only been roughly 25,000 since 1999, meaning that nearly 100,000 employees have lost their jobs."
The Swedish union Unionen also voiced its opposition to a Pfizer deal in a letter to the Swedish government, saying Sweden needs to unite behind an independent AstraZeneca.The Swedish union Unionen also voiced its opposition to a Pfizer deal in a letter to the Swedish government, saying Sweden needs to unite behind an independent AstraZeneca.
Meanwile, Pfizer executives made millions by cashing in shares in the drugmaker in February, regulatory filings show. The chief executive, Ian Read, sold $10.6m of shares while the chief financial officer, Frank D'Amelio, sold $8.9m of stock and Dolsten offloaded shares worth $2.1m.Meanwile, Pfizer executives made millions by cashing in shares in the drugmaker in February, regulatory filings show. The chief executive, Ian Read, sold $10.6m of shares while the chief financial officer, Frank D'Amelio, sold $8.9m of stock and Dolsten offloaded shares worth $2.1m.
Pfizer's share price has dropped by 9% to about $29 since Read's and D'Amelio's share sales. This is the typical result of making a takeover bid and there is no suggestion of wrongdoing by any of the executives.Pfizer's share price has dropped by 9% to about $29 since Read's and D'Amelio's share sales. This is the typical result of making a takeover bid and there is no suggestion of wrongdoing by any of the executives.
• Additional reporting by Jennifer Rankin Additional reporting by Jennifer Rankin