* PM Cameron says "I'm not satisfied" with pledges so far
* Pfizer has given 5-year commitments on research
* Political storm deepens over Pfizer takeover proposal
* Cameron hints Britain could intervene in takeover deal
(Recasts with Cameron comments)
By William James and Kate Holton
LONDON, May 7 Prime Minister David Cameron
demanded U.S. drugmaker Pfizer give stronger guarantees
it will keep jobs and investment in Britain in order to secure
his government's blessing for a takeover of AstraZeneca.
By proposing the biggest ever foreign takeover of a British
firm, New York-based Pfizer has sparked fierce debate on whether
the government should let outsiders buy a pharmaceuticals group
seen as a national champion in a strategically vital industry.
The government initially welcomed the bid as a vote of
confidence in a tax system it has designed to attract investors.
But after intense pressure in parliament, Cameron said on
Wednesday that Britain had to be hardheaded and indicated he
even supported possible intervention to hold up the purchase.
"The commitments that have been made so far are
encouraging," Cameron said when asked about the $106-billion
takeover offer during his weekly question session in parliament.
"But let me absolutely clear, I'm not satisfied. I want
more. But the way to get more is to engage," he added.
"We want the investment, the jobs and the research that
comes with that competitive tax system."
Though the government has only limited legal power to block
any merger, Pfizer Chief Executive Ian Read has already given a
five-year commitment to complete AstraZeneca's new research
centre in Cambridge, retain a factory in Macclesfield and put a
fifth of its research staff in Britain if the deal goes ahead.
A spokesman for Pfizer declined to address Cameron's
comments directly, saying the company would be pleased to work
with British parliamentary committees which have called Pfizer
and AstraZeneca bosses to explain the impact of any takeover.
The ghosts of previous foreign takeovers and concerns about
job cuts have haunted the Pfizer bid, ratcheting up the pressure
on the instinctively free-market Conservative-led government to
stiffen its stance.
Cameron's comments are especially significant as Britain
prides itself on running one of the world's most open economies
that has welcomed foreign investors across many industries.
But Britain has been burned too.
During Kraft's 2010 acquisition of chocolate maker
Cadbury, the U.S. food company promised to keep open a key
factory, only to renege on that soon after the deal was done.
Speaking to lawmakers, Cameron did not answer directly on
whether he wanted to apply a "public interest test" to the
Pfizer proposal but he said he agreed with Business Secretary
Vince Cable who said Britain could apply the test. That would
mean asking regulators to judge whether the deal was in the
"I absolutely agree with what the business secretary said
yesterday but let me be clear, the most important intervention
we can make is to back British jobs, British science, British
R&D, British medicines and British technology," Cameron said.
"The assessment that I want is from the business department
on this deal," he added. "I will judge all these things about
does it expand British jobs, British investment, British
The opposition Labour party has called on Cameron to expand
the provisions of the public interest test to allow ministers
more power over any possible takeover of AstraZeneca, though any
move to do so could face legal challenges.
Just a year before a parliamentary election, those demands
have increased the pressure on Cameron to be seen as tough on
Pfizer while not discouraging foreign investment.
Media reports that two advisers to Cameron had previously
been paid by Pfizer were dismissed by the prime minister
spokesman, who said there was "nothing in" them.
Imposing such a test could further complicate Read's bid -
already twice rejected by AstraZeneca - to create the world's
largest pharmaceuticals business and save Pfizer billions of
dollars in taxes by shifting its domicile to Britain.
Pfizer has sought to allay fears that the proposed takeover
would deal a blow to drug research, saying the new company would
bolster innovation and speed the development of new treatments.
It said the combined group would be able to expand its
global research, speed up the development of treatments and
offer its products more widely in emerging markets.
Read and AstraZeneca CEO Pascal Soriot will appear before
two parliamentary committees next week to explain the merger.
"AstraZeneca is one of the bastions of the UK's
world-leading pharmaceutical sector," said Labour lawmaker
Andrew Miller, who chairs the science and technology committee.
"Next week's hearing will be an opportunity for us to
scrutinise the pledges on research and development being made as
part of this potential takeover and pose questions about how the
government will ensure that these commitments are met."
AstraZeneca itself has already made large cutbacks as it has
struggled to sustain profits in the face of a wave of patent
expiries and past lack of success in its research laboratories.
It announced plans to shutter its Charnwood research and
development centre in central England in 2010, a year before
Pfizer's decided to close most of its drug research at Sandwich.
AstraZeneca's planned move to a new site in Cambridge will
also involve further job losses, with the number of R&D posts in
Britain expected to fall by around 400 to 2,200 by 2016.
(Additional reporting by Ben Hirschler; writing by Guy