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Pharmaceutical industry

MPs to scrutinise Pfizer’s bid for AstraZeneca

MPs are to consider the proposed £63bn takeover bid of the UK drug manufacturer AstraZeneca by the US pharmaceutical company Pfizer.

The parliamentary Business, Innovation and Skills Committee announced today (6 May 2014) that it will be inviting both companies to appear before it as part of its inquiry.  

While the Science and Technology Committee is going to ask science minster David Willetts about the impact of the merger on the UK science base on 14 May 2014, Stephen McGinness, the committee clerk, told The Pharmaceutical Journal.  He added that the committee is also considering whether it will invite representatives from the two companies to question about the proposed merger.

The announcement reflects the growing political interest in the proposed takeover since it was revealed last week.   

Labour’s leader Ed Miliband has written to the prime minister expressing concern about the bid and has accused David Cameron of “cheerleading” on behalf of Pfizer.

He wrote: “Pfizer’s bid for AstraZeneca affects one of the UK’s most significant investors in research and development, a major contributor to our science base, and 6,700 high quality jobs in the UK.

“Despite those high stakes, the impression created in recent days has been of a government cheerleading for this deal on the basis of a short letter with inadequate assurances.”

The letter followed released correspondence between Pfizer and the prime minister in which the company made nine promises concerning any takeover which it said reflected its “long-term” commitment to the UK.

The pledges include its commitment to complete the AstraZeneca development planned for the Cambridge Biomedical Campus and that the UK would be the centre of the joint companies’ European business.

Pfizer also said that at least 20 per cent of the joint companies’ research and development staff would be based in the UK.

The letter was sent to Mr Cameron on Friday (2 May 2014) – the same day that the AstraZeneca board rejected the latest increased takeover offer by Pfizer on the grounds that it was “inadequate”. In a statement it said that the offer substantially undervalued AstraZeneca and was not a basis on which to “engage with Pfizer.”

In another move the AstraZeneca board today (6 May 2014) published an update for shareholders on its business strategy which confirmed its “excellent growth prospects”.

The update comes on the same day that Pfizer published its financial results for the first quarter of 2014 which revealed a nine per cent fall in revenue compared to the same quarter last year. The financial report coincided with an announcement from business secretary Vince Cable that Pfizer cannot use the UK as a tax haven.

• This article was amended on 8 May 2014 to include an announcement from Vince Cable.

Citation: The Pharmaceutical Journal DOI: 10.1211/PJ.2014.11138148

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