LONDON (Reuters) - British lawmakers on Tuesday summoned bosses of U.S. drugmaker Pfizer to explain a $106 billion takeover bid for pharmaceutical firm AstraZeneca which has raised fears over UK jobs, research and intellectual property.
Prime Minister David Cameron is facing growing pressure from lawmakers to secure undertakings from the New York-based company if it pulls off Britain’s biggest takeover by a foreign buyer.
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, chairman of the parliamentary Science and Technology Committee, told Reuters in an interview.
“We want a lot more information,” said Miller, a member of the opposition Labour party, whose leader Ed Miliband has called for a substantive assessment of any takeover.
Parliamentary committees cannot block the takeover and Cameron’s Conservative-led coalition government has stressed the deal is a matter for the companies’ boards and shareholders.
But the public questioning of Pfizer is likely to stoke a debate about whether Britain should allow foreigners to buy up one of the champions of its $2.5 trillion economy.
AstraZeneca - whose executives have also been summoned - rejected on Friday the 63 billion pound ($106 billion) bid, but Pfizer is expected to come back again to pursue Britain’s second largest pharmaceutical company.
Miller said the best solution would for the chief executives of both companies to appear before his committee next week. In any case, the firms had to field people who had the authority to answer questions.
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.
When asked about the possible takeover, Cameron’s spokesman said: “We will engage very actively with both companies in terms of the importance of R&D, of skills, of expanding the skill base in the UK and we will keep doing that.” A decision on any deal was “a commercial decision”, he added.
But with a year before a general election, opposition lawmakers and even some in Cameron’s own party have expressed concern about the lack of power the government has to block such big deals which have implications for the national interest.
Pfizer was criticized 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.
Britain has been burnt before on foreign takeovers - notably Kraft Foods Group Inc’s 2010 acquisition of Cadbury, when the U.S. firm promised to keep open a factory, only to change its mind soon after the deal was completed.
“You remember a few years ago Kraft made similar promises and then reneged - how can we pin them (Pfizer) down in the absolute sense to guarantees so that they will not do what they did with their plant at Sandwich?” Miller said.
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.
“The company’s track record in the UK raises concerns,” Miliband said in a letter to Cameron. “This merger would have an impact for decades to come, so it is not enough to have a few specific promises that only last for the next few years.” ($1 = 0.5929 British Pounds)
Reporting by William James; editing by Michael Holden and David Stamp