Britain could use its national interest powers to veto US pharmaceutical manufacturer Pfizer’s £63bn bid for UK-based AstraZeneca, business secretary Vince Cable has said.
UK law states any deal can be vetoed if deemed not to be in the national interest, as concerns mount that the country could be used by the American Pfizer as a tax haven as it seeks to create the world’s largest pharmaceutical company.
As the takeover saga intensifies with MPs questioning the business secretary on the deal in the House of Commons yesterday, Prime Minister David Cameron is facing calls to seek assurances over jobs, intellectual property and research from New York-based Pfizer.
Despite being supported by the Prime Minister and chancellor George Osborne, Dr Cable has reaffirmed the government has the power to stand in the way of any deal – the largest in UK corporate history – being rubber stamped.
“We are alive to the national interest considerations in this regard. We see the future of the UK as a knowledge economy, not a tax haven,” Dr Cable said.
He added: “”Our focus is on what is best for the UK: securing great British science, research and manufacturing jobs and decision making in the life sciences sector.”
Pfizer chief executive Ian Read has written to Mr Cameron giving a five-year commitment to complete a new research centre in Cambridge, while also retain an existing Macclesfield factory and placea fifth of its research staff in the UK.
But critics say the potential deal could mirror that of when American giant Kraft Foods overtook Cadbury in 2010 and reneged on a promise to keep a Bristol factory open shortly after the deal’s completion.
Fears over potential job losses were voiced by shadow business secretary Chukka Umunna, who cited the 2011 closure of one of Pfizer’s Kent factories which resulted in 2,400 job losses.
“Labour’s concerns do not arise because this would be a foreign takeover, albeit the largest in UK corporate history,” said Mr Umunna, who also called for a stronger public interest test assessing whether takeovers of companies like AstraZeneca are in the public interest.
“They exist because of the potential impact on jobs and growth in the UK pharmaceuticals industry; whether it protects Britain’s knowledge, research and skills base; and whether it comes with guarantees of long-term investment in the UK.”
Former AstraZeneca chief executive Sir David Barnes has also criticised Pfizer by comparing the industry giant to a “praying mantis.”
Sir David, who oversaw the merger between Astra and Zeneca in the late 1980s, said: “The risk is that the past history of Pfizer has shown that they tend to extract destructive synergies, they have done that in the past.
“I have a great concern that they will act like a praying mantis and suck the lifeblood out of their prey.”