* UK could use public interest powers, Business Secretary
* Lawmakers summon Pfizer, AstraZeneca bosses over takeover
* Opposition Labour party demands assessment of any deal
* Finance minister Osborne says supports deal that creates
* Sweden's finance minister voices concern over the deal
(Adds former boss of AstraZeneca)
By William James and Guy Faulconbridge
LONDON, May 6 Britain could use its public
interest powers to intervene in U.S. drugmaker Pfizer's
$106 billion takeover bid for British pharmaceutical company
AstraZeneca, Business Secretary Vince Cable said on
Prime Minister David Cameron is facing growing pressure from
lawmakers to secure promises about jobs, research and
intellectual property from the New York-based company if it
pulls off Britain's biggest takeover by a foreign buyer.
"One of our options as the government would be to consider
using our public interest test powers. This would be a serious
step and not one that would be taken lightly but I'm open-minded
about it," Cable told parliament. Cable's Liberal Democrat party
shares power with Cameron's Conservatives.
British law allows takeovers to be blocked if they are held
to damage the national interest, but only in some industries.
"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," Cable said, referring to critics who say the
deal may be partly designed to reduce Pfizer's tax bill.
"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," he added.
Just a year before a parliamentary election, Pfizer's 63
billion-pound bid has ratcheted up pressure on Cameron, exposed
divisions in his coalition government and drawn criticism from
the opposition Labour party, which has implored the government
to ensure British jobs are safeguarded.
Pfizer's offer, though rejected by AstraZeneca, dominated
Britain's politics on Tuesday, stoking a wider public debate
about whether Britain should allow foreigners, albeit from a key
ally, to buy up one of the champions of its economy.
"I have a great concern that they will act like a praying
mantis and suck the lifeblood out of their prey," David Barnes,
who ran AstraZeneca in the late 1990s, told the BBC.
The possible deal also drew attention elsewhere in Europe,
with Swedish Finance Minister Anders Borg telling the Financial
Times he viewed Pfizer's pledge to keep AstraZeneca jobs in
Britain and Sweden with scepticism after a similar deal in 2002.
"We are worried," he said. "The experience from Sweden when
Pfizer took over Pharmacia was that they made some very strong
commitments to research presence in Sweden. We can only come to
the conclusion they scaled down and focused on cost reduction."
The public interest test is enshrined in British merger law
and gives ministers the power to intervene in deals, but only
for a limited number of reasons, notably national security,
media company mergers and for stability in the financial system.
Cable, who cautioned lawmakers about the need to avoid any
nationalistic anti-Americanism, said the government must
maintain neutral on the takeover and that it was ultimately a
matter for shareholders of the two companies.
But in contrast to Cameron or Chancellor of the Exchequer
Osborne, Cable, who is seen on the left of his smaller party,
went further, pointedly sending a clear message that the
government reserved right to intervene if necessary.
"I would certainly rule out intervention on protectionist
grounds," he said. "But I am not ruling out intervention,
because we need to look at all the options available to us."
He has previously said that he was considering all options,
including reviewing the terms under which the public interest
test could be applied.
Opposition Labour leader Ed Miliband has asked Cameron to
make a substantive assessment of any takeover and called on the
government to allow a stronger public interest test for
Cameron's spokesman told reporters that the deal was a
commercial matter for shareholders and that the government would
continue to speak with both companies about the importance of
research, skills and expanding the workforce's skills.
"Our sole interest here is in securing good jobs in Britain,
good manufacturing jobs, good science jobs," Osborne said when
asked by reporters about a possible takeover.
Pfizer aims to create the world's biggest pharmaceuticals
company and cut its tax bill as British rates are lower than in
its U.S. base. The government is keen to promote Britain's
corporate tax regime and has held talks with both companies.
But members of two parliamentary committees - science and
business - said there was significant disquiet about the Pfizer
bid for AstraZeneca and that binding guarantees were needed to
ensure British interests were upheld.
"Are we certain that the national interest has been properly
protected?" Andrew Miller, Labour chairman of the parliamentary
science and technology committee, told Reuters.
"We want a lot more information," said Miller.
Parliamentary committees cannot block the takeover.
Pfizer was criticised by lawmakers for a decision three
years ago to shut most of its research work at a large R&D
centre in Sandwich, southern England, where Viagra was invented,
with the loss of nearly 2,000 jobs.
"On the relative merits of the two companies, I do not
propose to treat this as a beauty parade," Cable said.
"But it is fair to say that there have been very substantial
redundancies from both companies in recent years, of roughly the
same order of magnitude. On the positive side, they are very
considerable investors and collaborators."
Pfizer Chief Executive Ian Read has written to Cameron
giving a five-year commitment to complete a new research centre
in Cambridge, retain a factory in the northwestern town of
Macclesfield and put a fifth of its research staff in Britain.
Britain has been burnt before by foreign takeovers - notably
Kraft Foods Group Inc's 2010 acquisition of Cadbury,
when the U.S. company promised to keep open a factory, only to
change its mind soon after the deal was completed.
($1 = 0.5929 British Pounds)
(Writing by Guy Faulconbridge, additional reporting by Kate
Holton and Ben Hirschler; Editing by David Stamp, Alastair
Macdonald and Steve Orlofsky)