UPDATE 2-Senators urge tough U.S. review of Pfizer bid for AstraZeneca

Wed May 14, 2014 6:09pm EDT

(Adds comment from company in reaction to senators' concerns)

WASHINGTON May 14 (Reuters) - Six U.S. senators asked antitrust regulators to take a hard look at Pfizer Inc's plan to buy rival AstraZeneca PLC if the two companies reach a deal, saying they had "significant concerns" about how the proposed transaction would affect consumers.

AstraZeneca, formed in 1999 from the merger of Sweden's Astra and Britain's Zeneca, has rejected a $106 billion offer from U.S. drugmaker Pfizer, but Pfizer has not given up and a possible deal has raised concerns in Europe and the United States.

"Should a merger or acquisition ultimately be accepted by AstraZeneca, whether under the terms of that offer or any subsequent offer, we want to bring to your attention our significant concerns with the potentially harmful impact to consumers that would result," the senators said in a letter.

The senators, all Democrats, said that a 2009 deal by Pfizer to buy Wyeth Laboratories was followed by a Pfizer decision to close research and development sites.

"Pfizer's record of reducing efforts to innovate and bring new products to market following prior acquisitions is plain," the senators wrote to the top officials of the Department of Justice and the Federal Trade Commission. The two agencies share the job of enforcing antitrust law.

Pfizer took issue with this assertion, saying the lawmakers "do not have all the facts about Pfizer's R&D (research and development)."

"Since the integration of Wyeth, we have had good momentum in R&D with 13 drug approvals," the company said in a statement, noting that still more drugs were in the pipeline.

The lawmakers also criticized Pfizer for saying it wanted to merge with AstraZeneca to create a UK holding company with a UK tax domicile, while maintaining its operational headquarters in New York.

"We view with skepticism any pro-competitive justification offered in support of this acquisition in light of Pfizer's stated motivation for the transaction - avoidance of U.S. taxation," the lawmakers said.

The letter was signed by Senators Richard Blumenthal of Connecticut, Sherrod Brown of Ohio, Chris Coons of Delaware, Dick Durbin of Illinois, Mazie Hirono of Hawaii and Sheldon Whitehouse of Rhode Island.

Pfizer said in response to the senators' comment on taxes that it expected discussions of a tax reform to continue.

"Pfizer supports comprehensive tax reform that enhances the global competitiveness of U.S.-based companies operating internationally," the company said in its statement. (Reporting by Ros Krasny and Diane Bartz; Editing by Sandra Maler, Peter Cooney and Ken Wills)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
SharedGrowth wrote:
This is yet another reason why we need to enact the Shared Economic Growth proposal, http://sharedgrowth.blogspot.com/?view=magazine . These tax-fueled merger/inversions are destroying U.S. jobs while depleting competition.

May 15, 2014 12:21pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.