No.10 ‘meddling in drug firm merger’
DAVID Cameron yesterday weighed into the proposed takeover of AstraZeneca, saying he’d received ‘robust assurances’ about British jobs if it goes ahead.
In an unusual intervention during talks over the sale of one of Britain’s largest firms, the Prime Minister said he had no intention of allowing an ‘abject surrender’ to the US giant Pfizer.
But ministers face claims of ‘extraordinary’ meddling in the deal, after Downing Street hailed the offer as a ‘positive step’ and Cabinet Secretary Sir Jeremy Heywood was appointed to negotiate with Pfizer, despite the Government’s insistence any decision is up to the AstraZeneca board.
Mr Cameron was speaking after the British firm yesterday rejected a bid of £63billion – £4billion higher than last time – saying it still ‘substantially’ undervalued the business.
Pfizer is expected to make a fresh bid in the coming weeks, and its chief executive stepped up the pursuit by writing to Mr Cameron to make assurances about retaining research bases in this country.
Labour’s business spokesman Chuka Umunna accused ministers of ‘acting in concert’ with Pfizer, despite grave concerns in the science industry about its long-term plans.
He suggested the maker of Viagra wanted the deal to enjoy lower tax rates in Britain, and accused ministers of treating a ‘jewel in the crown of British industry’ as simply ‘an instrument in some tax-planning game’.
He also attacked Sir Jeremy’s role, adding: ‘It’s extraordinary, unparalleled, for a Cabinet Secretary to be appointed along with another individual to negotiate with the bidder of a target company. There doesn’t seem to be anything like the engagement with the Astra board that there has been with Pfizer, when Astra is the British company.’ Lord Heseltine, the former deputy prime minister who is advising Mr Cameron on economic strategy, told Radio 4 the Government should have more powers to ensure takeovers are in British interests rather than those of the buyer. AstraZeneca’s
‘Instrument in a tax planning game’
board rejected the bid after less than three hours of deliberation. It said the offer was inadequate given the firm’s pipeline of potentially lucrative new drugs, including a treatment for lung cancer.
Executives also questioned Pfizer’s tax motives, as US law would allow it to pay the UK rate of corporation tax at 21 per cent compared with up to 35 per cent in the States, regardless of its commitment to jobs or investment.
When Pfizer completed a £50billion takeover of rival Wyeth in 2009, some 33,500 jobs were axed over several years, including 1,500 people at its own research facility in Sandwich, Kent – where Viagra was created.
Pfizer’s own former top scientist has railed against the way the US firm’s takeovers destroy research teams.
Dr John LaMattina’s was president of global research and development at Pfizer. He later published a paper in the journal Nature Reviews Drug Discovery, saying: ‘In major mergers today, not only are R&D cuts made, but entire research sites eliminated. Nowhere is this more evident than with Pfizer.’
Pfizer’s chief Ian Read wrote to Mr Cameron promising to employ a minimum 20 per cent of the company’s research staff in the UK.